A reform of German citizenship law in 2000 was expected to greatly increase the number of foreign residents becoming German citizens. In fact, the naturalization rate fell and has remained low ever since. This outcome cannot be explained either by existing research on citizenship laws or by scholarship on individual incentives to naturalize. Instead, this article argues that the family context shapes decision making about citizenship, with distinctive behavioral implications. Parents have an incentive to naturalize and thereby extend their new citizenship status to their children. The introduction of a right to citizenship for many children born in Germany to immigrant parents removed this incentive for the parents to naturalize. The author tests the predictions of this argument against both qualitative and quantitative evidence. The article concludes with a discussion of other domains in which it may be possible to gain analytic leverage by studying political decisions in the family context.