Economic benefits of acquiring citizenship

We have previously seen that in the classic analysis of T.H. Marshall citizenship consists of civil, political and social rights. We have also observed that the differences between citizenship and long-term residence have become smaller in terms of the civil and social rights linked to both statuses, but that political rights are generally still reserved for citizens.

A long-term resident migrant who holds civil and social rights similar to citizens, but lacks interest in gaining political rights, could still have an economic motive to naturalise. As explained by Don J. DeVoretz and Nahikari Irastorza, recent empirical studies from Europe and North America lead to the conclusion that there is an economic premium derived when immigrants acquire citizenship in their destination countries. In fact, the more naïve economic models used in the previous century left these premiums undetected, so that ‘the economic analysis of citizenship ascension [remained] dormant until the early 21st century’.

This field still being in the infant stage, important gaps in our knowledge are how and why the economic premium varies by gender, immigrant source country, immigrant entry class, and waiting period for naturalisation. It also remains unclear to what extent residents of the receiving and sending countries economically gain or lose by the process of citizenship ascension. This would depend on whether the new citizens pay more in taxes than they use in services (in the host country) and whether naturalisation has an impact on the new citizens’ remittances (to the sending country). The effect of naturalisation on a sending country’s economy is particularly hard to measure, ‘since few data sets exist to trace the origins and ultimate residency of host country naturalised citizens’. The authors mention the example of China, where Chinese born people who naturalised elsewhere but work or invest in China as ‘return migrants’ are registered in China as foreigners.

The effects of the citizenship premium will remain hard to measure unless ‘small and specific studies [are] conducted which can clearly identify the birthplace and ultimate citizenship of the return migrant’. Truly global research on this topic will likely remain difficult. As explained by one of the leading projects in this field, the research on citizenship premium presupposes the possibility to draw on big data from central population registers and the project is therefore limited to Germany, the Netherlands, the four Scandinavian countries, the United States and Canada.

Author: Dr. Olivier Vonk