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Germany’s Refugees Are Starting to Pay Off

Leonid Bershidsky

(Bloomberg Opinion) -- The tidal wave of asylum seekers that hit Europe in 2015 is often stereotyped as an invasion of poorly qualified migrants destined to be charity cases in the receiving countries. Recent research shows it’s not true. Germany, which welcomed the immigrants and almost immediately regretted it, is likely to end up profiting from Chancellor Angela Merkel’s decision to let them in, especially if it keeps taking steps to ease these immigrants’ path to employment.

For a paper published earlier this year, Cevat Giray Aksoy from the European Bank for Reconstruction and Development and Panu Poutvaara from the ifo Institute at the Leibniz Institute for Economic Research surveyed immigrants from the refugee crisis about their reasons for leaving their home countries. Their sample was constructed to mirror the geographic and demographic patterns of migration across the Mediterranean during the crisis, as recorded by the International Migration Organization. They discovered that 77% of respondents – those from Afghanistan, Iraq, Somalia, Sudan and Syria – fled war and persecution, while the rest, mostly from Algeria, Morocco and several African countries, came for economic reasons.

This in itself isn’t surprising: Most of the 2015-2016 immigrants were fleeing armed conflicts. But Aksoy and Poutvaara also made a more intriguing finding: Better-educated people are significantly more likely to try to escape war and persecution than their less-educated compatriots. Those escaping conflict are, to a greater degree than economic migrants, a self-selected group of people with decent job qualifications. In poor North African countries, economic returns to education and skills are high enough for people to stick around rather than make a dangerous journey to Europe; but in Iraq or Somalia, it’s the best-trained workers who suffer the biggest relative losses, and thus have the greatest impetus to leave.

Moreover, these educated asylum seekers tend to choose destination countries with higher returns to skills – that is, those with relatively higher inequality: Germany, France and Italy over Sweden, the Netherlands and Austria. The less qualified tend to look for nations with quicker application processing and better social safety nets.  

Obviously, European countries’ immigration policies played a role in determining the destinations, but Germany ended up, all in all, with a positively self-selected group of undocumented immigrants. These people, government statistics show, are anything but hopeless – Germany just needs to sort out how their qualifications correspond to its labor market needs. 

That’s the principal bottleneck. German is one of the tougher European languages to master, and the country’s current rules complicate the recognition of diplomas and vocational training certificates issued outside the European Union. Last year, just 36,400  foreign professional degrees were recognized in Germany; even though that’s 20% more than in 2017, that’s a laughable number given Germany’s status as a major landing place for immigrants (it added 500,000  to its population in 2018).

Despite this high barrier for entering the German labor market, however, the refugees are increasingly finding work. According to Germany’s Federal Employment Agency, 35% of the refugees who arrived in 2015 were employed in October 2018 – up from 20% a year before. According to the German labor union DGB, 81% of college-educated refugees and 45% of those with a vocational qualification work below their skill level, and the wages they receive are significantly lower than the national average. Still, it’s a testament to the refugees’ tenacity that, just three years after arriving, and likely without any knowledge of German, more than a third of them are gainfully employed. 

Although Merkel’s open door policy highly unpopular, the German parliament in June passed a law making it easier to work in Germany with a foreign qualification. Among other changes, it lifts the requirement for employers to prove that no German or European worker could be found to fill the job. This should help any newcomers, including the refugees already in Germany.

It’s hard to expect the immigrants, many of whom went through unimaginable hardship, to adapt to life in a new country within the first few years. But, given the self-selection described by Aksoy and Poutvaara, Germany can expect its generosity to pay off. Integration programs are expensive, of course: Germany spent 15.1 billion euros ($16.7 billion) on them last year. But then, it’s not more expensive than bringing up children and training them to take up the same jobs, and Germany’s population would have been decreasing without immigration, anyway.

Germany and other European countries just need to ease the newcomers’ access to the labor market a little more. A quicker, more automatic process for recognizing qualifications would almost certainly pay off. After all, many of the refugees came in the hope of applying their existing skills in the new country, and showing so little trust in these skills is bad policy.

To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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