Leveraging Labour Market Potentials of Immigrants in Germany
ResearchUnlocking Labour Market Potentials: Maximising Integration and Immigration Policies
Since the first recruitment of foreign workers almost 70 years ago, Germany has become the world’s second most important destination for international migrants, after the United States. Despite this fact, there has been a long-standing reluctance among policymakers and in public discourse to acknowledge Germany’s status as an immigration country. Yet, a proactive integration and immigration policy is more important than ever, given the stagnant employment opportunities for newly arrived migrant cohorts over the last two decades. Ukrainian refugees, in particular, possess considerable untapped potential in the job market, as a study conducted by ZEW Mannheim reveals, based on microcensus data.
“With this data, we can compare the integration trajectories of various migrant groups, ranging from the so-called guest workers to those who migrated from Eastern Europe after the fall of the Iron Curtain, as well as refugees and EU citizens from both old and new Member States,” explains Paul Berbée, an economist at ZEW’s “Labour Markets and Social Insurance” Unit and co-author of the study.
“Ukrainian individuals who sought refuge in 2022 have notably better employment prospects, thanks to their strong educational background, compared to earlier refugee groups who arrived in Germany during the Yugoslav wars or around 2015,” Paul Berbée continues. “However, in order to truly harness this potential, it is crucial to have enabling factors in place, such as access to childcare and flexible work arrangements, especially since a significant portion of these individuals are women with children.”
Migrants make indispensable contributions
“Immigration is indispensable for Germany,” explains Paul Berbée. “For over 50 years, migrants have become an integral part of Germany’s economy and society. Most migrants have been successful in the job market and make indispensable contributions to the country. However, our study also reveals that integration into the labour market is a lengthy process, which has become even more challenging since the 1970s. Therefore, it is vital to strengthen forward-thinking, long-term immigration and social policies that address the specific challenges faced by different groups of immigrants.”
Economic downturns disproportionately affect migrants
“The experiences of the guest worker cohorts reveal that immigrants continue to be disproportionately affected by economic changes and unemployment, even after many years in the host country. On average, migrants exhibit lower employment rates and earn less than native-born individuals, with their children unable to fully overcome these disparities,” explains Paul Berbée, shedding light on the developments since the 1960s. He also emphasises significant differences among various migrant groups: “While EU citizens often find work and, in some cases, earn higher wages than the native population, those from non-European countries with a high proportion of refugees face particular challenges. Even children of immigrants who have gone through the German education system continue to face disadvantages.”
Removing barriers
He calls upon politicians to take action, stating, “It is crucial for policymakers to actively promote integration through targeted measures and make better use of the potentials at hand. Firstly, our education system must provide equal opportunities to children of immigrants, preventing the perpetuation of labour market disadvantages across generations. Secondly, individuals with foreign qualifications should have easier access to the German job market. The introduction of the new Skilled Immigration Act marks a significant step in this direction.”
