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In Germany Hosting Refugees Benefits the Economy

by Financial Economy

Five years after arriving in Germany, more than one in two adult refugees have found a job. They have helped boost the country’s economy, but are the first to be affected by the impact of the Covid-19 crisis. In Germany hosting refugees benefits the economy.

In Germany Hosting Refugees Benefits the Economy

“We can do it,” Angela Merkel promised the Germans in 2015, in response to the fears of some of them of seeing the state ruin and unemployment swell with the arrival of a million candidates for the job. ‘asylum. Five years later, studies confirm the Chancellor’s optimism.

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More than one in two of working-age refugees are now employed, reveals the Federal Employment Agency (BA). “The people received are on average the youngest and most qualified in their country of origin, which made it easier to obtain new qualifications”, explains Felicitas Schikora, researcher at the German Institute for Economic Research (DIW) .

Successful Integration Into the Labor Market

“Migrants generally go to segments of the labor market where they do not compete with locals,” notes Hippolyte d’Albis, researcher at CNRS. Finding verified in the German case: refugees are over-represented in the logistics, distribution, tourism and personal services sectors.

Germany, with an aging population, suffers from a lack of manpower for certain positions. “Migrants help reduce the gap between supply and demand in the labor market,” says Felicitas Schikora. It specifies that those benefiting from the right of asylum can work without restriction, as of their arrival. As for the children of foster families, a study by the German Socio-Economic Panel (SOEP) shows that they “have integrated well into schools and express a strong sense of belonging”. Many have started vocational training.

Stimulation of the Economy

The draft federal budget details all the expenses attributable to the reception of these new arrivals: social assistance, integration programs (vocational training and language courses), logistical costs linked to asylum procedures, etc. In 2019, the federal government spent around 6% (22 billion euros) of its budget on this.

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For Hippolyte d’Albis, this has “no negative impact on public finances” because the refugees’ contribution to the economy reimburses these expenses: “The construction of reception places stimulates the construction industry, people are recruited to manage the reception. The allowances received by migrants are returned to the economy through consumption and then the taxes they pay. ”

Thus, the year which followed the migration shock of 2015, private consumption increased by 2%, bringing German growth to 2.2% of GDP (against 1.7% in 2015). The coronavirus crisis tarnishes this record. Of course, the entire national economy is experiencing a dramatic decline. But refugees, overrepresented in temp agencies and in the most affected sectors such as hotels and tourism, bear the brunt of the consequences. They are more concerned with rising unemployment than Germans and foreigners from the European Union.

Source: https://www.la-croix.com/

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