Asylum and the labour market: Asylum seekers stabilise the German labour market

Asylum seekers have contributed significantly to stabilizing Germany’s labor market, according to data released by the Federal Employment Agency. The agency reported that foreign workers, particularly those from asylum countries such as Syria and Afghanistan, have played a central role in maintaining employment levels in recent years. Between June 2014 and June 2025, the growth in the workforce was largely driven by non-EU nationals, with 43 percent of job creation attributed to individuals from outside the European Union. Of this figure, approximately one-third originated from the eight most common asylum countries. Without immigration from abroad, the number of employed individuals in Germany would have declined sharply. From 2014 to 2024, the total number of employed people dropped by nearly 3.9 million. At the same time, the number of working-age individuals without German citizenship increased by almost 3.4 million. This shift highlights the growing reliance on migrant labor to sustain economic activity. Daniel Terzenbach, a member of the board of the Federal Employment Agency, emphasized that the success of integrating refugees into the labor market has been crucial. He noted that the number of socially insured employees from the main refugee countries, Syria and Afghanistan, has more than doubled over the past five years. This increase reflects both the efforts of the government and the adaptability of migrants to the German labor system. Terzenbach added that these developments demonstrate the potential for further progress and underscore the need for continued investment in the future of the German labor market. In western Germany, Germans and immigrants together contribute to creating new jobs, while in many regions of eastern Germany, new employees are predominantly foreign-born. These newcomers help offset the effects of demographic change, particularly in areas where local populations have aged and birth rates remain low. However, the influx of migrants has not yet fully addressed the challenges posed by demographic shifts. According to Andrea Nahles, head of the Federal Employment Agency, the potential labor force, the sum of currently employed and potentially available workers, is projected to decline by around 40,000 for the first time in 2026. This trend is expected to intensify in the coming years due to the retirement of generations born during periods of high fertility. The agency's findings suggest that while migration has supported the labor market, long-term sustainability will depend on addressing broader demographic trends. With aging populations and declining birth rates, the challenge of maintaining a stable workforce continues to grow. The data underscores the complex interplay between immigration, economic needs, and demographic realities in shaping Germany’s labor landscape.