Does integration increase life satisfaction?
In recent years there has been increasing interest in measuring subjective well-being in economics; most of the literature on immigrants has however continued to focus on `objective' measures of integration such as employment and education outcomes. This paper aims to complement these studies by analysing the life satisfaction of immigrants once settled in the host country, examining which elements of integration matter for life satisfaction. We find that in terms of simple averages immigrants appear to be less satisfied than natives. However, contrary to the results of some recent papers, this difference can be explained by factors related to economic integration, such as the details of their employment conditions, rather than cultural factors such as feelings of not belonging, which often loom large in the public mind. Also segregation does not affect their life satisfaction per se. While having host country citizenship appears to have a large, significant positive effect in a simple pooled ordinary least squares specification, exploiting a natural experiment of changes in the citizenship law in the host country we find that this is driven by a selection effect rather than an increase in life satisfaction due to obtaining citizenship.