Well-being Consequences of Irregularization: A Counterfactual Analysis to Explain Differences in Life Satisfaction Between Rejected and Recognized Asylum Seekers in Germany

Research on the subjective well-being of irregular migrants remains scarce. This paper examines the consequences of asylum application rejections for life satisfaction. It develops a theoretical framework based on the Theory of Social Production Functions, from which specific hypotheses are derived to explain why and how the life satisfaction of rejected asylum seekers is lower than that of individuals with legal residence status – referred to as the “rejection gap”. Using data from the IAB-BAMF-SOEP Survey of Refugees, the study applies a counterfactual analysis via propensity score matching to empirically test these hypotheses. The results indicate that rejected asylum seekers report significantly lower levels of life satisfaction. Among the legally induced constraints examined, only income, health and housing conditions contribute to explaining the “rejection gap”; employment status, language proficiency, and family reunification do not. While concerns about xenophobia do not mediate the gap, stronger fears among rejected asylum seekers about being forced to leave Germany partially account for the observed differences. Despite this, a considerable portion of the rejection gap remains unexplained. Life satisfaction is lower among rejected asylum seekers with longer durations of stay, whereas it is higher among recognized refugees, highlighting the importance of temporal dynamics. The paper concludes with a critical discussion of the findings, situating them in the broader research context, and outlines directions for future research and potential policy implications.