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The Positive Effects of Immigration in Germany

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The chosen article's main focus lies around one of the positive aspects of migration from the point of view of Germany which is the hosting country in this case. It is known that Germans, in general, are diligent, focused and precise but they are not famous for being innovative. According to a chart based on data from 2017 Americans, Swedes and several other nations were overtaking Germany in the competition of who is more likely to launch new businesses.

However, the country has experienced a significant wave of immigration in the last decade which drove up entrepreneurship and thus, increased the number of startups. In 2015, 44% of the newly found businesses were launched by not German-born citizens. Back in 2003, this number was only 13%, this rise was associated with the effect of immigration. There have been two bigger waves, one in 2011-2014 mainly from Eastern Europe and the second was in 2015-2017 when the sending countries were overwhelmingly from The Middle East.

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Some of the refugees are already coming with the mission of being self-employed and creating their own businesses. Others realize later that they are working beneath their qualifications and decide to break out of it. Another incentive reason for them to make start-ups is the difficulty of finding jobs in existing organizations. Applicants sadly can already use their chance to an interview by having a foreign-sounding name. The last argument the article mentions why immigrants are more likely to start their own businesses is that entrepreneurship requires seeing opportunities over risks. Usually, people who are migrating after what they have been through in their home countries and while they achieved to get to Germany, they needed to become risk-takers.

On the other hand, new businesses are not easy to start. Germany is rated 114th on the list of countries to ease the process of creating start-ups. There are several regulations and legal issues that need to be taken care of that foreigners are not properly informed about, because through German integration programs they are only getting help to overcome language obstacles and to find regular employment possibilities.

Effects of Immigration

Though this article only focuses on one particular advantage of migration for the hosting country, it is important to mention other negative and positive effects of it. In order to do that, first, we have to look at the sending countries (with the highest number of emigrants) in the case of Germany, which are Turkey, Poland, and Syria. People are leaving their home countries seeking either higher wages, greater professional recognition or better living circumstances. This way the sending nations are losing labor force and potential tax payments, which leads to lower national well-being. On the other hand, emigrants no longer require government spending, for instance on medical care.

The demographic consequences of the boom in immigration include a significant rise in Germany's population and an advantage in moderating the country’s median age. The macroeconomic analyses show that the per capita income growth has held up and the unemployment rate has declined. Furthermore, the hosting country is receiving knowledge benefits (as detailed above), new citizens who will also become a new source of tax payments and who can drive up the economy by spending their salary locally on food, housing, and leisure.

All in all, it seems that since 2010 the German economy has successfully adapted to the enormous increase in immigration. While the inflow of immigrants has considerably slowed down, the country’s decreasing unemployment suggests that Germany will be attractive for foreign labor in the future, with the additional benefit of stabilizing the aging of its workforce.

References:

  1. Immigrants are bringing entrepreneurial flair to Germany. (2017, February 4). Retrieved from https://www.economist.com/europe/2017/02/04/immigrants-are-bringing-entrepreneurial-flair-to-germany
  2. Effects of Surge in Immigration on Germany's Economy (n.d.). Retrieved from https://libertystreeteconomics.newyorkfed.org/2019/05/how-has-germanys-economy-been-affected-by-the-recent-surge-in-immigration.html

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