Since January 2014, Romanians and Bulgarians have had free access to the German labour market. Experience shows that large numbers of immigrants to Germany are highly qualified professionals who not only contribute to avoiding skills shortages but also help to stabilise the public finances in Germany.
People who have immigrated in the past few years are more often highly qualified than people already living in Germany. Around 29 per cent of those who came in the 2000s have an academic degree compared with 19 per cent of the total population. For people from Romania and Bulgaria, the share is 25 per cent. Thus, immigration from these countries should not be considered “poverty immigration”.
In the labour market, immigrants often achieve good positions. In 2011, 23 per cent of the working population who immigrated in the previous ten years worked in highly specialised or managerial professions, for example, as managing directors, academic teachers and doctors. For new immigrants from Romania and Bulgaria, at least 18 per cent fall into this category.
For innovation and growth, it is important that enough people are trained in the so-called STEM subjects, namely having a university degree in science, technology, engineering or mathematics. About 10 per cent of adult immigrants have such a qualification while this figure is only 6 per cent among all adults living in Germany.
Also, medical staff and nurses from abroad are in demand in Germany. In 2011, about 6 per cent of physicians in Germany had immigrated since 2000; among geriatric nurses, this figure was 4 per cent.
In addition, immigrants are on average much younger and therefore more likely to be employed than the rest of the population. In 2012, 42 per cent of all people born abroad were employed; among the native-born population, the rate was only 36 per cent.
Thus, immigration not only helps to meet the demand for skilled workers but it also stabilises the German statutory pension, health and nursing care insurance schemes. This is because migrants pay more in social security funds than they receive in benefits. Moreover, immigrants help to finance public expenditure, especially those costs that arise independent of the population size, such as military defence and debt payments.
However, it is questionable whether future immigration of young people will be to the same extent as today. Currently, most immigrants come from eastern and southern European countries where demographic change will probably lead to skilled labour shortages in the coming years, as in Germany. Improving prospects in the domestic labour market will then reduce the incentive for young people to move to Germany. In turn this will mean that immigration to Germany is not a given. Rather, Germany needs to take steps to become more attractive for skilled immigrants. In particular, legal barriers for skilled immigration from non-EU countries should further be reduced and Germany should become more open for immigrants.
The German labor market is on the verge of a fundamental upheaval. While the number of people in the labor force has risen steadily in recent decades, it is likely to drop significantly as soon as the baby boomers retire.
The demographic transition is confronting Germany with a growing shortage of skilled workers. In a simple, static labor market model, wages in occupations where the demand for labor is high should rise at an above-average rate to restore market equilibrium.