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The Integration of Refugees in Germany: Intergovernmental Aspects of Public Sector Costs and Benefits

  • In this paper, the 2015/16 budgetary effects of refugee immigration in Germany are analyzed. The Public sector spends billions of Euros to accommodate and supply refugees and to integrate those into the labor markets who have a perspective for a permanent or even medium-term residence permit. In case of a successful integration, we can expect flow backs in the form of income tax revenues and social security contributions. The costs and financial benefits of several types of refugees are modelled and – weighted with the number of cases – added to a public sector ‘financial balance’. Financial ‘profitability’ depends on labor market integration, the volume of labor participation and the future income earned, which depends on qualification, education and training. The levels of government will experience diverging cost-benefit balances. They will only receive future flow backs in the form of their share in the income tax revenues if refugees find jobs within their territories. Administrative efforts should concentrate on a successful labor market integration of refugees and no longer continue the policy of preventing them from entering the labor market for many years and thereby making them heavily dependent on public transfer payments.

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Author:Gisela Färber, Dominique Köppen
Parent Title (English):International Journal of Public Administration
Publisher:Taylor & Francis
Place of publication:Philadelphia, Pa.
Document Type:Article
Year of Completion:2020
Publishing Institution:Deutsches Forschungsinstitut für öffentliche Verwaltung
Release Date:2020/02/21
First Page:102
Last Page:114
Documents of the German Research Institute for Public Administration (FÖV):Sonstige Schriften
Licence (German):License LogoUrheberrechtlich geschützt