1.7.2006 | Von:
Michael Heinen and Anna Pegels

Do Continued Restrictions Make Sense for Germany?

Despite the positive economic developments in the EU15 countries that chose to allow the free movement of workers, Germany has already announced its intention to keep restrictions in place, at least until the end of the second phase of the transitional period in 2009, if not until 2011.
Passanten und Kraftfahrer überqueren am 24.01.2012 die deutsch-polnische Grenze am Stadtpark in Görlitz.German-Polish border in Goerlitz (© picture-alliance/dpa)

A statement issued by the Federal Ministry for Labour and Social Affairs lists several arguments in support of this decision [1]. First, it points out that Germany has a high overall unemployment rate: there were 5 million unemployed peoples registered in February 2006, which amounts to an unemployment rate of 12.2%. This rate is considerably higher in the eastern federal states, and primarily low- and unqualified workers are affected by this unemployment. This fact, combined with the stated expectation that primarily low- or unqualified workers would arrive from the EU8 states, led the government to forecast increasing tension in the labour market and falling wages due to competition, should the free movement of workers be allowed. Second, pointing to Germany's geographical proximity to the EU8 countries, the government predicts a greater influx of migrant workers from the EU8 than has been the case in the United Kingdom, Ireland and Sweden. This is attributed to the assumption that, since it facilitates commuting, geographical proximity eliminates the greatest barriers to migration: separation from family, friends and familiar environment. Finally, it is argued in the statement that existing bilateral agreements with EU8 countries and Germany's new Immigration Act are effective tools for recruiting the right number of workers in the right sectors, in order to meet Germany's labour market needs.

With regard to the first argument, Germany's high unemployment rate and relatively rigid wages could indeed pose some difficulties in certain sectors, if the number of low-skilled EU8 workers increased dramatically within a short period of time. However, observations made thus far suggest that it is neither likely that the influx would be of an unmanageable magnitude nor probable that the majority of those arriving would be low-skilled. As pointed out in the European Commission's report, a large proportion of EU8 migrants who work in EU15 countries have medium- or high-level qualifications, both of which are sought after in countries like Germany.

Regardless of the number and qualifications of labour migrants, fears have been raised in Germany that a lack of opportunities on the labour market could lead migrants to make more demands on the social welfare system than contributions to the country's economy. However, access to welfare benefits by non-German citizens is already quite restricted, and Germany could follow the UK and Ireland in restricting EU8 migrants' access to benefits while allowing the free movement of workers. It should be noted, however, that benefits do not seem to be the main attraction for EU8 migrants in choosing a country of destination. Sweden, he only EU15 state to allow EU8 nationals unlimited access to its welfare system, has received far fewer migrants from these countries than either the UK or Ireland since May 2004.

As to the government's assumption that Germany's geographical proximity to the EU8 would heighten labour migration flows to an unacceptable degree, there are two reasons why a large influx of migrants would probably occur – if at all – only in the short term. First, while there may be large numbers of unemployed young people in Central and Eastern European countries at the moment, these countries have declining birth rates and will soon be confronted with demographic problems of their own. As the population of working age in these countries declines, so will unemployment and thus one reason for workers to seek employment abroad. Second, as time passes and the economic performance of Central and Eastern European countries converges with that of the EU15, the difference in wages – another important economic push to migrate – will also decline. Add to this the personal barriers to migration mentioned above, and the option to stay and work in a familiar environment near family and friends will become even more attractive. Some studies predict that the population decrease in Central and Eastern Europe will begin affecting the supply of labour by 2010 [2]. Therefore, the longer Germany waits, the less likely it is that much-needed labour migrants will be available to help Germany combat its demographic problems and skills shortages [3].

The government's prediction that the geographical proximity between Germany and the EU8 may lead to an increase in commuting or circular migration may very well hold true. However, there is reason to doubt the government's suggestion that this could have a negative effect on the German labour market. In general, circular migration involves the migrants in question maintaining ties, if not a residence, in their countries of origin. It follows that circular migration ensures a degree of flexibility in the labour markets in both the sending and receiving countries.

Finally, there is reason to question the government's assertion that existing bilateral agreements and the new Immigration Act are effective enough tools for meeting Germany's immigration needs. In 2004, overall migration from Central and Eastern Europe to Germany sank to its lowest level since 1991. One of the aims of the Immigration Act, which took effect in January 2005, was to make Germany more attractive to highly-skilled migrants. However, this new legislation has not yet been particularly effective in attracting them [4]. In addition to the United States, Canada and Australia, Germany is now competing with fellow European Union member states for the immigrants it needs to counter its demographic and skills shortages. If such migrants tend to seek employment now in countries with fewer entry and residence restrictions, networks may be built up which direct migrant flows to these countries long after Germany has decided to do more to attract them.


See Federal Ministry for Labour and Social Affairs (2006).
See Fassmann/Münz (2002).
For a detailed description of Germany's demographic problems and skills shortages see "focus Migration" Policy Brief #2 Does Germany need Labour Migration?
Estimates circulated in the media place the number of people who received residence permits under the new provisions for highly-skilled workers in 2005 at only 900.



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