Government aid and child refugees’ economic success later in life: Evidence from post-WWII GDR refugees

Abstract

We exploit a unique historical setting to investigate how refugee-specific government aid affects the medium-term outcomes of refugees who migrate as children and young adults. Among German Democratic Republic (GDR) refugees who escaped to West Germany between 1946 and 1961, only the subgroup acknowledged as being “political refugees” were eligible for refugee-targeted aid, and only after 1953. We combine several approaches to address identification issues resulting from the fact that refugees eligible for aid were both self-selected and screened by local authorities. We find positive effects of aid eligibility on educational attainment and income among male and female refugees who migrated as young adults (aged 15 to 24). Among male refugees who migrated as children (aged 1 to 14), we find that aid eligibility at arrival leads to an increased likelihood of enrollment in the academic track of secondary school, but we see no such effect on female refugees who arrived as children.