Immigration to Germany has increased significantly since 2011, primarily due to the immigration of citizens from other euro area countries and those which joined the EU in 2004 and 2007. This increase is mainly attributable to a lack of immigration barriers and the good economic situation on the German labor market compared to other European countries. Model simulations show that GDP growth in Germany between 2011 and 2016 would have been 0.2 percentage points lower on average per year without EU immigration. However, structural barriers to immigration remain. Additionally, due to economic recovery and demographic changes in other EU countries, migration from the EU may not continue as strongly as before. It is therefore important to strengthen immigration incentives, such as by giving immigrants more opportunities to find employment matching their skills. In addition to EU immigration, the German economy may also benefit from facilitating access to the labor market for skilled workers from third countries.
Keywords: Business Cycle, Migration, International Macroeconomics