On the one hand the effect on per-capita income and the fiscal balance will be slightly negative, while unemployment will also rise as a result of the refugees’ presence. On the other hand higher public expenditures together with an increasing number of employed refugees will boost economic growth. Between 2016 and 2020 the accumulated increase in the country’s real GDP could amount to as much as € 95 billion. The actual extent of this effect will largely depend on labour market integration and education policy.
The Effect of the Recent Influx of Refugees on Germany’s Economy
In the course of 2015 and 2016 about 1.2 million refugees entered Germany. The authors estimate the short- to medium-term effects of this on the country’s economic development using a macro-econometric model.
- Tobias Hentze / Galina Kolev ·
- IW-Trends No. 4 ·
- 16 January 2017