After serving as a major immigrant destination in Western Europe for five decades, Germany today undergoes a demographic change with an aging native population on the one hand, and a growing young and young-adult immigrant population on the other. In this talk I discuss three alternative but related theoretical mechanisms to understand the reasons for educational disadvantages of the young immigrant population in Germany. Relying on a nationally representative sample of ninth-graders, I test the role of three mechanisms to understand the variation in educational performance between native Germans and the five largest immigrant communities in Germany: the descendants of labor migrants with Turkish, Mediterranean (Greek, Italian, Spanish, Portuguese), and former Yugoslavian origins, as well as recent migrants from Poland and return migrants with German ancestry from the former Soviet Union. My findings show that the political economy of immigration and context arrival to be the strongest mechanism explaining the differences in educational performance, measured as ninth-grade math and reading scores. The cultural proximity and duration of stay hypotheses provide only limited explanations. The continuing low educational performance of immigrant youth in Germany entails pressing policy issues within the German political authority as well, given that high school performance is a strong determinant of later educational attainment and life chances of youth in Germany.