Migration and Happiness: Evidence from Germany

With a shrinking population and a rising dependency ratio, Germany needs young migrants, willing and able to integrate with the German society and actively participate in its economic progress. In order to devise successful immigration and integration policies, policymakers should be aware of the factors affecting migrants’ intentions and decisions. In this paper we explore the impact of different measures of subjective well-being on the intended duration of migration stay. Unlike previous research that focused on a binary outcomes of stay intentions, we utilize more detailed data on the year length of intended stay. This way we are able to estimate the marginal effects of happiness on each additional year of stay. With and without addressing endogeneity and sample selection, we find that migrants who are happy with life tend to stay permanently in the host country. Our results also suggest that spouse residence location, education and personal income affect male intentions to stay, while peer income and number of children affect female intentions to stay.