The Local Environment Shapes Refugee Integration: Evidence from Post-war Germany

Almost eight million forced migrants arrived in West Germany after WWII. We study empirically how regional conditions affected their economic, social and political integration. We first document large cross-regional differences in integration outcomes. We then show that high inflows of migrants and a large agrarian base hampered integration. Religious differences between migrants and natives had no effect on economic integration. Yet, they decreased intermarriage rates and strengthened anti-migrant parties. Based on our estimates, we simulate the regional distribution of migrants that maximizes their labor force participation. Inner-German migration in the 1950s brought the actual distribution closer to its optimum.

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