The arrival of immigrants from other European Union (EU) members provides a significant boost to Germany's gross domestic product (GDP), a study published on Wednesday by the German Institute for Economic Research (DIW) found.
According to the study, the migration of more than five million EU citizens to the bloc's single largest economy since 2011 has raised German annual GDP growth by an average of 0.2 percentage points. In individual years such as 2015, the benefit which Germany reaped from the freedom of movement within the EU was even put as high as 0.3 percentage points.
Vacancies in German companies which are filled by EU citizens lead to higher overall employment in the country which is also reflected in higher consumer demand. Additionally, the freedom of businesses in Germany to hire workers from any of the EU's 28 current members helps alleviate domestic labor shortages which would otherwise result in higher production costs, higher prices and slower growth.
"Without immigration from the rest of the EU, GDP in Germany would have merely expanded by 1.2 percent, rather than 1.5 percent, in 2015", Marius Clemens, a research associate in the DIW's Forecasting and Economic Policy department, said. "This is a not insignificant contribution which EU immigration has made - and continues to make", Clemens added.
Drawing on data compiled by the Federal Statistical Office and Eurostat, Clemens and his co-author Janine Hart calculated that 5.1 million EU citizens in total have come to Germany during the past seven years. The group consequently accounted for a larger share of immigrants than all other countries combined.
One reason for the silent uptick in EU immigration from 2011 onwards was identified by the study in the gradual introduction of free movement for laborers for the latest members of the bloc.
The DIW further pointed out that many citizens in southern European countries which were more heavily affected by the latest economic crisis moved to Germany in search of better opportunities. The study authors highlighted that the relative deterioration of economic conditions in the country of origin relative to Germany was generally the most common factor (60 percent) which could explain changes in the pattern of EU migration witnessed since 2011.
"EU immigrants come to us to find work - and this is mostly also what happens, as many studies show", Hart explained.
Most EU immigrants in Germany are young, well-qualified and have high labor market participation rates. In 2017, the share of citizens of other countries who were employed was measured at 74.6 percent, compared to 70.6 percent for German citizens.
Clemens argued on Wednesday that German policymakers were well-advised to ensure the continued and improved access of EU citizens to the domestic labor market in light of a rapidly ageing local population and increasingly severe labor shortages.
"In order to remain attractive to immigrants from Europe, Germany will have to make a greater effort because the economy is already improving again in many countries and the Eurozone in particular", he warned.
For example, immigrants from the bloc would have to be offered more opportunities to find jobs in Germany which were appropriate for the level of their professional skills. The study authors proposed simplifying existing procedures for the recognition of foreign qualification towards that end.