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Labor Market Integration of Migrants in Germany

by Dr. Annette Ranko

Overview and lessons for future integration policies

In the last decade, the employment of foreign nationals has significantly increased. These are positive developments. However, imbalances are also evident: foreign nationals are disproportionately employed in helper occupations and disproportionately receive SGB-II benefits. They are thus much more affected by poverty, risk of poverty, and unemployment than others. To prevent a socio-demographic gap from forming and solidifying between groups of different backgrounds and to strengthen participation, a significant increase in support and demand is necessary in the areas of education, qualification, and labor market integration.
May 9, 2023 Ordering Information

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In recent years, the number of foreign nationals in Germany has increased. According to the Central Register of Foreign Nationals, in 2010 there were 6.75 million foreigners living in Germany, but as of March 2022, the number had already risen to 12.3 million. Meanwhile, the Federal Employment Agency observed positive developments in the labor market. The absolute number of foreign nationals employed subject to social security contributions in Germany nearly tripled from 1.802.661 in January 2010 to 5.135.947 in September 2022, according to the Federal Employment Agency. Both EU citizens and third-country nationals saw a significant increase. The proportion of EU nationals of working age who are  subject to social insurance contributions (SV quota) has also increased from 33 percent to 58 percent during the same period, while the rate for third-country nationals has risen from 30.8 percent to 41.8 percent. In comparison, the SV quota for German nationals stood at 65.3 percent as of September 2022.

The Federal Employment Agency also reported an improvement in the labor market integration of persons from the eight major countries of origin for asylum seekers: 37 percent of persons of working age were employed subject to social security contributions as of September 2022, compared to only 24.6 percent in January 2010.

However, the Federal Employment Agency’s figures also show that foreign nationals employed subject to social security contributions are disproportionately represented in low-skilled and unskilled "helper" positions, accounting for 37.8 percent. This is in contrast to all social security-contributing employees living in Germany, who account for only about 16.7 percent. For German nationals, this is significantly lower at 13.2 percent. Conversely, only 17.3 percent of social security-contributing foreign nationals work as "specialists" or "experts," while the national average is significantly higher at 28.4 percent. Third-country nationals have slightly better values than those from EU countries, but have a significantly higher proportion of individuals dependent on benefits from the basic security for job seekers under the SGB II (SGB II rate).

The SGB II rate was 5.4 percent for German nationals in August 2022, compared to almost four times higher at 21 percent for foreign nationals.

 

Read the monitor "Zuwanderung und Arbeitsmarktintegration” here as PDF.

Please note, the monitor is only available in German.

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About this series

The Monitor series deals with one main topic at a time from the perspective of KAS experts and places it in the political and social context on the basis of a few key points.

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The current main topics are “Development policy”, “Sustainability” and “Election and social research”. The contributions of these sub-series are presented for you on separate overview pages in addition to the overall series.