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International Migration and effects on domestic economy of Germany.
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Recent Labour Migra0on to Germany
Cosmin Marin | Alexander Gabrichidze | Biruk Terrefe
Course: Interna0onal Trade Instructor: Welf Werner Fall 2013
Research Ques+on
To what extent has the recent economic downturn affected the migrant workforce in Germany?
Outline 1. Introduc+on i. Legal Context (Defini7ons) ii. Hypotheses (Argument)
2. Unemployment Rates i. Context ii. Facts & Figures iii. Analysis &Evalua7on
3. Remi=ance Ou>lows i. Context ii. Facts & Figures iii. Analysis & Evalua7on
4. Social Benefits i. Context ii. Facts & Figures iii. Analysis & Evalua7on
5. Conclusion (Limita7ons)
6. References
7. Discussion
Migrant Workforce
Foreign Born popula+on: 10.5 million
Na+ve Born popula+on: 4.9 million
Legal Context
Argument Variable Indicator Hypothesis Employment level Unemployment Rate (%)
Increase
Disposable Income OuSlow of RemiTances ($)
Decrease
Socio-‐economic status Social Benefits Recipients (#) Increase
vs. Economic crisis
Subsequent waves of migrants
1. Effects on Employment
Context Recession related effects
Increase in unemployment of low-‐skilled
workers
Faster Rebound of German economy
GDP of Germany grew by 0.7% in 3rd quarter of 2009
GDP of Eurozone grew by 0.5% in 3rd quarter of 2009
Unemployment Rates for the total workforce of Germany
Facts & Figures
+0.8%
+0.4%
Much lower than expected!
Kurzarbeit (short-‐+me work subsidy scheme) -‐ “CuIng working hours and salaries of full-‐7me employees in
industries and firms that struggle to keep their full-‐7me and experienced workers in the recession”
Evalua+on
Impact
Manufacturing sector 91.8%
na0ve
Data not disaggregated along migrant
status
76% of recipients work in
Manufacturing
900,000 jobs saved
Sectorial divisions!
Evalua+on (con7nued) Share of foreign migrant workforce with social insurance in the total German workforce by sector
2. Effects on Remi=ances
Context RemiTances provide
es0ma0on of disposable income
Assump+on: Stable net migra0on
(rather stable un0l 2009)
Fall in OuSlow of RemiTances
Facts & Figures
Figure 1.0 – Migrant RemiNance OuPlows Source: World Bank Annual RemiTance OuSlow Data
Year Remi=ance Ou>lows (US$ millions) Germany
2012 15,392
2011 16,202 2010 14,674
2009 15,770 2008 15, 234
2007 14,082 2006 12,700
Evalua+on Increase in 2007 -‐ 2009
(1) Ini+al assistance to their source countries
Decrease in 2009-‐2010
Increase in 2011
Decrease in 2012
(1) Lagged implica0on of the crises, less disposable income
(2) Countries recovered, less dependent on remiTances
(1) Larger migrant popula0on in 2011 (Spain & Italy)
Exploratory Approach: Economic development of Turkey?
Evalua+on
Figure 2.0 – German Migrant RemiNance OuPlows compared to GDP growth of Turkey
-‐6.00%
-‐4.00%
-‐2.00%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2006 2007 2008 2009 2010 2011 2012
Remi=an
ce Ou>
lows
Year
German Remi=ance Ou>low vs. Turkish GDP growth
Migrant RemiTance OuSlows (US$ millions)
GDP Growth
GDP grow
th
Evalua+on Increase in 2007 -‐ 2009
(1) Ini+al assistance to their source countries
Decrease in 2009-‐2010
Increase in 2011
Decrease in 2012
(1) Lagged implica0on of the crises, less disposable income
(2) Countries recovered, less dependent on remiTances
(1) Larger migrant popula0on in 2011 (Spain & Italy)
(1) 2006 – 2011 nega0ve correla0on (Turkish GDP & German RemiNance OuPlows) (2) “reverse trend” of Migra0on in 2012
3. Effects on Social Benefits
Context Hartz Reform 2005
SGB II
Minimum security benefits
Ac0ve job seekers
SGB III
Unemployment benefits
Jobless individuals with former full-‐0me employment
!Data does not differen0ate between Migrants and foreigners!
Foreign Born popula+on: 10.5 million
Na+ve Born popula+on: 4.9 million
Facts & Figures Share of foreigners among all SGB-‐II recipients
+ 2%
Evalua+on
1) Manufacturing sector (na0ve) 2) Likelihood of registra0on (low) 3) Requirements (full-‐0me employment)
+ 2% + 26%
21% foreigners 9 %
foreigners
Explana+ons
Research Ques+on
To what extent has the recent economic downturn affected the migrant workforce in Germany?
Conclusion Variable Indicator Hypothesis Result Employment level Unemployment Rate (%)
Increase Slight Increase
Disposable Income OuSlow of RemiTances ($)
Decrease Fluctua0ons
Socio-‐economic status
Social Benefits Recipients (#) Increase Slight Increase
Overall subdued effect on migrant workforce
Explana+ons (1) Sectorial divisions between na0ves and migrants (2) Nature of crises affected specific sectors (3) Subsequent wave of immigrants (RemiTances)
Recommenda+ons (1) Even distribu0on of migrant workforce across sectors (2) Non-‐recogni0on of foreign qualifica0ons
Limita+ons (1) Legal context of German migrant workforce
(a) Inclusion of na0ve-‐born German ci0zens (ii) Defeats purpose of Migra0on: Movement of People
(a) Disables effec0ve comparisons
(2) Inconsistency in data collec+on (a) Sta7s7sches Bundesamt and
Bundesministerium fuer Arbeit und Soziales (3) Assump+ons
(a) Conclusion is specula0ve (i) difficult to single out economic crises (ii) many recession-‐related effects (b) Large volume of data
BA (Bundesagentur für Arbeit). (2010). Steering The Course In Turbulent Times 2009 Annual Report. Nurnberg: Bundesagentur . Bundesministerium für Arbeit und Soziales . (2009). Wirkungen des SGB II auf Personen mit Migra7onshintergrund. Duisburg: BMAS.
Elitok, S. P. (2013). RemiNance flows between Germany and Turkey: A Reverse Trend? Istanbul Policy Center. Istanbul: Sabanci University. IOM. (2010). Migra7on and the Economic Crises in the European Union: Implica7ons for Policy. Interna0onal Organiza0on for Migra0on . Geneva: IOM. Sta0s0sches Bundesamt. (2008 ). Mikrozensus 2007. Wiesbaden: DeSta0s. Van den Berg, H. (2004). The Interna0onal Migra0on of People. In H. Van den Berg, Interna7onal Economics (pp. 526-‐562). Boston, USA: McGraw-‐Hill Higher Educa0on. World Bank. (2013). Annual RemiNances Data OuPlows . Washington D.C.: The World Bank Group. World Bank. (2013, November 1st). The World Bank. Retrieved November 18th , 2013 from Turkey GDP growth (annual%): <hTp://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/countries/TR-‐7E-‐XT?display=graph>.
References
1. Why did most of you decide to study in Germany?
2. To what extent do the indicators effec0vely measure the impact of the economic crises?
3. Do the sectorial divisions within the workforce need to be bridged?
Discussion