Dragons Soaring to Success – Zodiac Sign, Education, and Wages of Immigrants from Chinese Societies in Germany

How culture shapes individuals’ actions is a question at the heart of social sciences, but causal evidence on this topic is scarce, particularly for immigrants. In this research note, I investigate how the belief in Chinese zodiac signs, a cultural belief without scientific basis, influences wages of immigrants from Chinese societies Germany. I focus on the effect of the Dragon zodiac sign, the most auspicious sign. To estimate the causal effect of the Dragon zodiac on wages, I employ a sharp regression discontinuity design. I focus on immigrants from Hong Kong, Macau, Mainland China, Singapore, and Taiwan (i.e., societies with ethnically Chinese majorities) born 12 weeks around Chinese New Year in the year of the Dragon. Using German administrative data from 125 individuals and 512 observations, I show that Dragons earn higher wages than non-Dragons in Germany. This wage premium is mediated by higher educational attainment of Dragons compared to non-Dragons. I do not find an effect of the Dragon zodiac sign on Germans’ wages. In summary, I show that origin-region culture shapes immigrants’ labor market success in the host region.