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BIPR | The Integration of Migrants in the German Labor Market: Evidence over 50 Years
The Integration of Migrants in the German Labor Market: Evidence over 50 Years

October 26, 2023 - 15:30

Jan Stuhler, Universidad Carlos III de Madrid

Event Recap

Professor Jan Stuhler opened the discussion by posing two questions: How predictable are integration outcomes of diverse groups, and has integration improved over time?

Focusing on first generation migrants from 36 various cohorts, Stuhler broke down the data into different waves. The first cohort came to Germany between the years of 1955-1973, comprised of working-aged men of Turkish, Yugoslavian, or Italian origin. Next came the consolidation period between1974-1987, representative of the reunification of families, followed by the fall of the Iron Curtain where mass waves of Eastern Europeans came between 1988-1995. Lastly Stuhler highlights a period of East-West integration between 1996-2006 and mentioned that currently Germany is witnessing a new wave of migrants because of turmoil in Syria and the war in Ukraine.

Importantly, Stuhler highlights the issues of integration for migrants, as there are large gaps in unemployment for migrant workers compared to natives, particularly evident in a case study of Turkish migrants who endured a sharp drop in employment during the 1990s. Stuhler identified that industry structure shocks incited severe unemployment across different groups, including the Italians and Spanish as well, yet it was the Turkish migrants who suffered the worst. One reason for that could be that after arriving to Germany on guest worker agreements, many Turkish migrants chose to stay while their other counterparts returned to their home countries. Stuhler also hypothesized that their lack of language skills limited the group's job prospects and that their ethnic clustering prevented full integration within German society.

For integration predictability, Stuhler claimed that employment gaps for migrants never close when compared to natives, with an average gap of 10 percentage points over one decade. There is still progress on this front, where employment rates over time tend towards convergence, but regarding income, we see divergence. This is attributed to natives' higher levels of education which affords them careers with higher pay. Interestingly, Stuhler calls attention to the fact that even with higher levels of education, there will still be a divergence when comparing income, due to discrimination, or because migrants tend to be sorted into worst jobs in terms of pay and career advancement.

Second generation data shows a 25% improvement in employment gaps, yet there are still large gaps present for groups that first struggled when they arrived, hinting at strong intergenerational correlations. Stuhler revealed that cohort characteristics are more predictive than individual level predictors, so if a basic fact about a cohort is known, such as the average education level, it is simple to predict how they are doing now.

As far as the improvement of integration, Stuhler reflected on German's revamping of integration policies such as more language training for migrants, yet the data does not reveal much positive change. He discussed how the composition of migrants has changed, the policies are new, and that they may not have been successful in reaching out far to different migrant communities. To see change, Stuhler presented the question if giving migrants better access to the labor market would produce better outcomes or simply attract more migrants and contribute to an already overwhelmed system.

The Integration of Migrants in the German Labor Market: Evidence over 50 Years

hosted by Professor Anna Maria Mayda

Jan Stuhler
Universidad Carlos III de Madrid

Jan Stuhler is Associate Professor at Universidad Carlos III de Madrid, and is affiliated with both the Swedish Institute for Social Research in Stockholm, as well as the Centre for Research and Analysis of Migration in London.

Stuhler received his PhD in economics from University College London in 2014. His interests are in labor economics, with secondary specializations in applied microeconometrics and public economics. Stuhler's research focuses on questions related to inequality and migration; he has published in several journals including the Review of Economic Studies, the Quarterly Journal of Economics and the Journal of Economic Perspectives. Among other questions, Stuhler analyzes how migrants integrate into the labor market, and how they affect labor markets in receiving countries.
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