The effect of citizenship on the long-term earnings of marginalized immigrants: quasi-experimental evidence from Switzerland

Abstract

We provide evidence that citizenship catalyzes the long-term economic integration of immigrants. Despite the relevance of citizenship policy to immigrant integration, we lack a reliable understanding of the economic consequences of acquiring citizenship. To overcome nonrandom selection into naturalization, we exploit the quasi-random assignment of citizenship in Swiss municipalities that held referendums to decide the outcome of individual naturalization applications. Our data combine individual-level referendum results with detailed social security records from the Swiss authorities. This approach allows us to compare the long-term earnings of otherwise similar immigrants who barely won or lost their referendum. We find that winning Swiss citizenship in the referendum increased annual earnings by an average of approximately 5000 U.S. dollars over the subsequent 15 years. This effect is concentrated among more marginalized immigrants.