Immigration, Crime and Prosperity
Abstract
A 400-district, 19-year panel of Germany: prosperity follows the quality of labour-market integration, not the quantity of migrants.
- Methods
- Two-way FE · Constructed indices · District panel
- Stack
- R · TWFE · renv · Make · INKAR · PKS
A balanced panel of 400 German districts (NUTS-3), 2003 to 2021, 7,200 observations, combining BBSR INKAR indicators, police crime statistics (PKS) and disaggregated state capital stocks.
Constructed metrics
- Labour Integration Efficacy (LIE): how efficiently a district absorbs its foreign-born population into the active labour market.
- Foreign Labour Supply Pressure (FLSP): the concentration of foreign labour reserves relative to the regional labour force.
Findings (two-way fixed effects)
- The integration dividend. A 1% increase in lagged LIE raises GDP per capita by about 0.028%.
- Quantity versus quality. A higher foreign-born share without integration has a slightly negative effect (β = -0.005).
- Property damage as a density proxy correlates positively with prosperity, capturing urban vibrancy rather than decline.
- Regional heterogeneity. The integration gains concentrate in mature, high-capital Western districts.
The whole study runs end to end with make all: a 32-stage pipeline under renv. The inkaR package was born here.