World Immigration News

Problem versus opportunity: Implications of immigration for workers’ welfare and entrepreneurship in Germany

Release Date: 2025-01-04
Media: CEPR
Summary: Recent immigration trends have placed significant pressure on developed economies, particularly in countries like Germany, which has been a major recipient of refugees. A study of the welfare effects of immigration in Germany between 2012 and 2017 shows that low-skilled immigration led to a 0.88% welfare loss for the average worker, with low-skilled workers suffering a 1.59% loss, while high-skilled workers saw a 0.9% gain. The effects of immigration were analyzed through the dual roles of immigrants as workers and entrepreneurs, with low-skilled immigration reducing productivity among low-skilled workers but benefiting immigrant-run businesses.

Germany’s cooperation with India, via the Migration and Mobility Partnership Agreement (MMPA), aims to boost high-skilled immigration, which could mitigate some of the losses caused by low-skilled immigration. However, such policies alone do not fully offset the negative effects.

The study also found that immigrant entrepreneurs contribute positively to job creation, and banning their entrepreneurial activities would reduce welfare for both immigrants and natives. Furthermore, ethnic segregation in businesses has a detrimental effect on welfare. The analysis concludes that while low-skilled immigration leads to some economic losses, facilitating high-skilled immigration and promoting entrepreneurship could benefit Germany's economy. However, the results do not account for demographic changes or immigrants' contributions to the pension system.
Tags: GERMANY

News Articles including "GERMANY"

Released on

Article Title