Non-EU immigration could boost Germany’s shrinking workforce

Germany should aim to attract more migrants from outside the European Union if they are to avoid a sharp fall in its workforce, a new study suggests.

The nation’s working-age population is set to fall by around a third from 45m to 29m by 2050, as a result of falling fertility rates. Focusing policy solely on the native workforce may not be enough to overcome this.

According to a new report by the Bertelsmann Foundation, increasing the number of working women and raising the retirement age to 70 would only add another 4.4m to the workforce.

The number of foreigners living in Germany totaled 8.2m in 2014, marking a record high as a proportion of the country’s whole population, which just exceeds 80m. Migration to Germany grew by 6.8% in 2014 against the previous year, with around two-thirds coming from EU member states.

However, with the whole of Europe battling against shrinking birth rates and aging populations, the report asserts that Germany needs to look beyond Europe to attract more skilled workers.

Many IZA World of Labor authors have written about the benefits that migration can bring to labor markets. John Kennan writes about how freer movement for workers can generate gains for sending and receiving countries, and can hold particular benefits for developing countries. Workers from these countries can see their wages double with open borders.

Meanwhile, Klaus F. Zimmermann writes how labor mobility can help to fill labor shortages and enhance innovation.

Read more here.

Related articles:
Freedom of movement for workers, by John Kennan
Circular migration, by Klaus F. Zimmermann