Skills and Speed of Integration Key to Fiscal Costs of Humanitarian Migration for Germany

A study conducted by the Centre for European Economic Research (ZEW) on behalf of the Heinrich Böll Foundation analyses how the recent massive intake of refugees could affect sustainability of government finances in Germany. The analysis relies on the method of generational accounting to simulate a range of possible long-term budget developments. The projections vary the speed of the economic integration process in a cohort of one million refugees arriving in 2015, and the level of professional skills humanitarian immigrants could eventually utilize in the labour market.

According to Holger Bonin, head of the ZEW Research Department "Labour Markets, Human Resources and Social Policy" and author of the study, the analysis shows that the intake of refugees is most likely to become a burden for German tax payers. However, the per-capita fiscal burden appears affordable, unless economic integration of the humanitarian immigrants is a complete failure. The study furthermore demonstrates that active social investment in economic integration and professional skills of the refugees could bring a substantial return. Each year of faster integration relieves the government budget, in the long run, by about 10 billion euros. Providing 200.000 unskilled refugees with a vocational degree in total generates additional net revenue of about 60 billion euros.

Contact

Prof. Dr. Holger Bonin, Phone +49(0)621/1235-151, E-mail bonin@zew.de