Past and Future Trends in Refugee Migration on the Regional Level in Germany - An Analysis and Projection of Labor Market Effects

Abstract

Since 2013, more than two million refugees have arrived in Germany and have been allocated across federal states and districts according to legal policies. A steadily increasing number of refugees is now entering the German labor market, albeit under varying economic and demographic contexts. However, regional differences in refugees’ labor market integration have received little attention both retrospectively and particularly prospectively, given the projected population decline across Germany. Addressing this apparent shortcoming in the literature, we collect data on refugee arrivals by gender, nationality, approval rates, and regional allocation from 1995 to 2019. Applying principal component analysis and time series analysis, we first analyze past patterns of refugee migration to Germany and project both arrivals and regional allocations by gender and nationality until 2030. Then, combining the collected migration figures for German labor market regions and official labor market statistics, we investigate past regional employment effects from 2008 to 2019. Next, we calculate corresponding future employment effects conditional on our projected refugee figures, our estimation results, and official regional demographic forecasts until 2030. Our findings suggest that refugee migration does not affect German labor market regions equally, but instead has and will continue to lead to distinct regional employment effects. Moreover, the labor market integration differs by gender and origin of the refugees. Consequently, the interaction of regional employment effects with projected population change gives rise to different regional mitigation potentials in view of the upcoming population decline.