Explainer-How migration to Germany is fuelling election debate on economy

By Riham Alkousaa

BERLIN (Reuters) - Limiting Germany's refugee intake is a major issue in the campaign for the February 23 federal election, with the conservatives and far-right parties leading polls partly thanks to promises to halt the influx.

At the same time, Europe's biggest economy needs more people to help plug labour shortages still posing a big obstacle to growth, and many experts say migration is crucial to sustaining the workforce and compensating for an ageing population.

HOW HAS MIGRATION AFFECTED GERMANY'S POPULATION?

Germany's net population rose by over 3.5 million between 2014 and 2024, driven entirely by migration. During this period, the number of German citizens fell by two million to 71.6 million. By contrast, the foreign population grew to 13.1 million from around 7.5 million, Statistics Office data showed.

Since 2022, Germany has taken in over two million refugees. Of those, about 1.2 million are from war-torn Ukraine. Most of the others are from Syria, Turkey and Afghanistan, data from the Federal Office for Migration and Refugees (BAMF) and the United Nations High Commissioner for Refugees (UNHCR) showed.

MIGRANTS: BOON OR BURDEN TO THE ECONOMY AND LABOUR MARKET?

Employment growth in Germany is now entirely reliant on foreign workers. A recent analysis by the Federal Labour Agency found that without migrants, Germany would have suffered a net loss of 209,000 jobs between September 2023 and September 2024. In the state of Bavaria, for example, the workforce hit a record 6.03 million last year, largely due to labour from abroad.

At the same time, among the 4.01 million employable benefit recipients in June 2024, 47% were foreign nationals. Ukrainians and Syrians made up more than 1.2 million of recipients by October 2024.

Over the past decade, federal government spending on jobless benefits has increased, rising significantly from 2020 and touching 29.7 billion euros ($30.8 billion) in 2024, the labour ministry said, citing a weaker economy and refugee arrivals.

HAS GERMANY'S LABOUR MARKET BENEFITED FROM THE REFUGEE INFLUX IN THE PAST DECADE?

Germany's hopes that refugees would address the skilled labour shortage have twice been dashed, first with mostly Syrian war refugees in 2015-16 and again with those from Ukraine in 2022, Wido Geis-Thoene of economic institute IW Cologne said.

The unemployment rate among people from asylum-origin countries is also significantly higher than that of foreigners overall, according to the Federal Labour Agency.

According to Germany's Institute for Employment Research, 54% of refugees who have been in the country for six years are employed. Of these, two-thirds work full-time, and 70% hold skilled jobs.

For Ukrainian nationals, employment rose by 45% year-on-year as of October 2024, bringing their employment rate to 31.4%.

WHAT MEASURES HAVE BEEN TAKEN TO IMPROVE REFUGEE EMPLOYMENT?

The labour ministry introduced a programme in 2024 aimed at accelerating job placement. The target group is employable refugees from Ukraine and the main asylum-origin countries who have recently completed a German integration course and receive citizens' allowances. More than 600,000 additional counselling sessions took place last year through the programme.

New regulations governing refugee employment took effect in February last year, allowing refugees in reception centres to work after six months instead of nine and pushing immigration authorities to grant work permits for refugees more quickly.

WHAT ARE THE MAIN CHALLENGES FOR REFUGEES TO ENTER GERMANY'S LABOUR MARKET?

Refugees face challenges including recognition of foreign qualifications, language barriers and difficulties related to trauma from conflict in their homelands. An uncertain residence status can further hinder job placement. 

Women, especially mothers, encounter additional obstacles as caregiving responsibilities limit the time for language learning and skill development. A 2024 OECD study showed that only 42% of immigrant mothers with young children were employed in Germany in 2019, compared with 73% of native-born mothers.

If immigrants with foreign university degrees had the same access to high-skilled jobs as native-born workers, Germany would have over 600,000 more people in such roles, the OECD study showed.

($1 = 0.9639 euros)

(Reporting by Riham Alkousaa; editing by Madeline Chambers and Mark Heinrich)