IW Report: Foreign Labor Integral to Germany’s GVA in 2024

(de-news.net) – The proportion of foreign workers without German citizenship has witnessed a marked increase, with approximately seven million non-German nationals employed in the Federal Republic of Germany as of 2024. According to recent findings published by the German Economic Institute (IW), nearly one in six individuals within the workforce did not possess German nationality, a notable rise from one in ten in 2015. This demographic transformation has exerted a significant influence on national economic output.

In the year 2024, foreign employees contributed an estimated 536 billion euros to Germany’s gross value added, of which 240 billion euros generated by those who entered the labor market subsequent to 2015. When incorporating upstream value creation and consumption-related effects, the aggregate economic reliance on foreign labor increases to 706 billion euros. Considerable regional variation is evident: Baden-Württemberg registered the highest proportion of value added attributable to foreign workers at 17.3 percent, whereas Mecklenburg-Vorpommern recorded the lowest at 5.4 percent.

IW economist Benita Zink underscored the direct correlation between the recruitment of foreign labor and enhanced regional economic performance. She further emphasized that successful integration is predominantly facilitated through participation in the labor market. In order to fully capitalize on this potential, Zink advocated for the simplification of procedures related to the recognition of foreign professional qualifications.

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