labour migration in germany after financial crisis

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Recent Labour Migra0on to Germany Cosmin Marin | Alexander Gabrichidze | Biruk Terrefe Course: Interna0onal Trade Instructor: Welf Werner Fall 2013

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International Migration and effects on domestic economy of Germany.

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Page 1: Labour Migration in Germany after Financial Crisis

Recent  Labour    Migra0on  to    Germany    

Cosmin  Marin  |  Alexander  Gabrichidze  |  Biruk  Terrefe  

Course:  Interna0onal  Trade    Instructor:  Welf  Werner    Fall  2013  

Page 2: Labour Migration in Germany after Financial Crisis

Research    Ques+on    

 To  what  extent  has  the  recent  economic  downturn  affected  the  migrant  workforce  in  Germany?    

Page 3: Labour Migration in Germany after Financial Crisis

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    

Page 4: Labour Migration in Germany after Financial Crisis

Migrant  Workforce    

Foreign  Born  popula+on:  10.5  million    

Na+ve  Born  popula+on:  4.9  million      

Legal  Context  

Page 5: Labour Migration in Germany after Financial Crisis

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  

Page 6: Labour Migration in Germany after Financial Crisis

1.  Effects  on    Employment  

Page 7: Labour Migration in Germany after Financial Crisis

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  

Page 8: Labour Migration in Germany after Financial Crisis

Unemployment  Rates  for  the  total  workforce  of  Germany    

Facts  &  Figures    

+0.8%  

+0.4%  

Much  lower  than  expected!  

Page 9: Labour Migration in Germany after Financial Crisis

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!  

Page 10: Labour Migration in Germany after Financial Crisis

Evalua+on  (con7nued)    Share  of  foreign  migrant  workforce  with  social  insurance  in  the  total  German  workforce  by  sector    

Page 11: Labour Migration in Germany after Financial Crisis

2.  Effects  on    Remi=ances  

Page 12: Labour Migration in Germany after Financial Crisis

Context  RemiTances  provide  

es0ma0on  of  disposable  income  

Assump+on:  Stable  net  migra0on  

(rather  stable  un0l  2009)  

Fall  in  OuSlow  of  RemiTances    

Page 13: Labour Migration in Germany after Financial Crisis

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  

Page 14: Labour Migration in Germany after Financial Crisis

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?  

Page 15: Labour Migration in Germany after Financial Crisis

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    

Page 16: Labour Migration in Germany after Financial Crisis

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    

Page 17: Labour Migration in Germany after Financial Crisis

3.  Effects  on    Social  Benefits  

Page 18: Labour Migration in Germany after Financial Crisis

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      

Page 19: Labour Migration in Germany after Financial Crisis

Facts  &  Figures    Share  of  foreigners  among  all  SGB-­‐II  recipients  

+  2%    

Page 20: Labour Migration in Germany after Financial Crisis

Evalua+on    

1)  Manufacturing  sector  (na0ve)  2)  Likelihood  of  registra0on  (low)  3)  Requirements  (full-­‐0me  employment)  

 

+  2%   +  26%  

21%  foreigners   9  %  

foreigners  

Explana+ons  

Page 21: Labour Migration in Germany after Financial Crisis

Research    Ques+on    

 To  what  extent  has  the  recent  economic  downturn  affected  the  migrant  workforce  in  Germany?    

Page 22: Labour Migration in Germany after Financial Crisis

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    

Page 23: Labour Migration in Germany after Financial Crisis

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    

 

Page 24: Labour Migration in Germany after Financial Crisis

 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  

Page 25: Labour Migration in Germany after Financial Crisis

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