Discussion Paper

How Has Germany's Economy Been Affected by the Recent Surge in Immigration?

Abstract: Germany emerged as a leading destination for immigration around 2011, as the country's labor market improved while unemployment climbed elsewhere in the European Union. A second wave began in 2015, with refugees from the Middle East adding to already heavy inflows from Eastern Europe. The demographic consequences of the surge in immigration include a renewed rise in Germany's population and the stabilization of the country's median age. The macroeconomic consequences are hard to measure but look promising, since per capita income growth has held up and unemployment has declined. Data on labor-market outcomes specific to immigrants are similarly favorable through 2015, but reveal challenges in how well the economy is adjusting to the second immigration wave.

Keywords: Germany; European Union; Europe; demographics; employment; labor markets; migration; immigrants; foreign workers; unemployment;

JEL Classification: E2;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2019-05-20

Number: 20190520