Europe’s Migrant Crisis Could Turn into a Jobless Crisis

November 10, 2015, 3:48 PM UTC
A man carrying his child waits with other migrants and refugees to be registered in a refugee center in Presevo, on October 25, 2015, after crossing the Macedonia-Serbia border. European Union and Balkan leaders met on October 25 to tackle the migrant crisis as Slovenia warned the bloc will "start falling apart" if it fails to take concrete action within weeks. AFP PHOTO / ARMEND NIMANI (Photo credit should read ARMEND NIMANI/AFP/Getty Images)
Photograph by Armend Nimani — AFP/Getty Images

Just like the Greek crisis called the existence of the euro into question earlier this year, Europe’s refugee crisis now threatens to undermine another pillar of the European Union: the Schengen zone. It is a passport-free, 26-countries area within which border control are not allowed. In reality, Europe’s borderless Schengen zone has practically seized to exist – at least temporarily. Several nations, including Germany, Austria, Slovakia, France and the Netherlands, abruptly reestablished border controls recently in light of the refugee influx.

There are still no signs of European solidarity or the sharing of burdens to be seen anywhere. Every country is looking out for itself. Hungary, with the help of the Czech Republic and Poland, has resolutely walled itself off. Greece, Croatia, Slovenia and Austria simply push along refugees as quickly as they can.

At the end of the line is Germany, which can hardly take in more refugees. If one looks at the position of the powerful Bavarian state government, where most of the new arrivals enter Germany, as well as recent opinion polls, it is clear that the point when Germany has reached its limit in terms of its capacity to take in more refugees is fast approaching.

In 2015 alone, Germany is expected to receive more than 1 million refugees. But even that number is uncertain, given that it still takes months before all refugees are actually registered by authorities and enter official statistics. Hence, forecasted numbers are being constantly updated and increased. Therefore, even the most recent estimate may still be a rather conservative one.

But even if the 1 million mark is not exceeded this year, that number equals more than 1% of the German population. Translated into a U.S. context, this would imply about 4 million people arriving in the United States within just one calendar year. That number is about a third of the total number of unauthorized immigrants that currently live in the U.S.

How do all those migrants get to Europe? The eastern Mediterranean route (mainly from Turkey to Greece) has overtaken the central route (from Tunisia and Libya to Italy) as the most commonly used route this year – with Syrians forming by far the largest migrant group.

Who are the current refugees? Information about their characteristics is still scarce. Based on official data from German authorities, this is what is known today about the refugees that have arrived in Germany this year: These refugees are rather young (only few are older than 40 years old) and predominantly men (two-thirds of all refugees). The most important countries of origin of recent refugees, based on data from the first half of this year, are Syria (20.3%), Kosovo (17.9%), Albania (13.6%), Serbia (6.3%), Iraq (5.2%) and Afghanistan (5.0%).

If the experience with past cohorts of refugees is any indication, about 13% may hold a tertiary degree, while more than half of them may arrive without as much as a vocational degree (i.e., with any proven skills in the trades), according to the Institute for Employment Research (IAB) of Germany’s Federal Labor Agency.

Of course, none of these statistics tell us anything about the extent to which their skills actually match the labor market demands of the receiving country.

By comparison, among economic migrants to Germany in recent years, the share of highly qualified persons (i.e., people with a tertiary degree) exceeded the respective share in the native population (35% vs. 20%), according to the Berlin Institute for Population and Development.

While a large proportion of the current wave of refugees consists of humanitarian migrants, there is also a sizeable share of economic migrants seeking a better living among them. Asylum is only rarely granted in the latter cases. As a result, the current share of successful asylum claims in Germany stood at about 40% recently.

Ultimately, the issue of the successful integration of these refugees into society at large comes down to their employment prospects. Based on past experiences with refugees and humanitarian migrants, one should not be overly optimistic.

For example, in Germany their long-term employment probability stood at about 55%, which is substantially lower than for economic migrants (75%), according to the Institute for Employment Research (IAB) of Germany’s Federal Labor Agency.

And, in the short run, not least due to language issues, one should not expect that their employment probability will be much higher than 30%. This is also why the unemployment rate in refugee-receiving countries is expected to rise in the short run.

In mid-September, the German government made an interesting personnel move when it announced that Frank-Jürgen Weise, the current head of the Federal Employment Agency, would also lead the Federal Office for Migration and Refugees (BAMF). This move was made, in part, in recognition of Weise’s excellent managerial skills.

But there also is a very close linkage between the refugee and employment issue. Technically, refugees in Germany are treated like long-term unemployed. This makes it plain that the biggest task in managing the wave of refugees is the correct profiling of these refugees when it comes to their employment qualifications.

It is widely known that the most effective integration strategy into a new society for any new arrival is to get them a job as soon as possible. Much will ride on the degree to which this task can be handled optimally.

As far as the EU as a whole is concerned, count on more meetings in Brussels to come up with some compromises, although getting to a more equitable distribution of refugees may prove even tougher than dealing with the critical eurozone issues.

Globally, the number of refugees from war has increased by almost 60%, from 37.5 million in 2005 to 59.5 million by 2014, according to UNHCR. The vast majority of these refugees are still in developing countries, often in countries neighboring the actual armed conflict. In the bigger scheme of things, the number that have actually made it to Europe is quite small – and, by definition, ought to be manageable. The continent thus faces a real test, in many ways.

Klaus F. Zimmermann is director of the Institute for the Study of Labor in Bonn, Germany, a global network of labor economists, as well as publisher of its “Simply Labor” blog.

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