More and more people are leaving the labour market due to reaching retirement age, whilst significantly fewer young people are coming through to take their place. As a result, the immigration of workers and specialists is becoming increasingly important for employment trends and ensuring a supply of specialists.
"Demographic trends are changing the labour market. The number of German and EU employees is already falling. Employees from third countries, in particular, help to stabilise companies’ labour requirements. We need labour migration to ensure that Germany’s labour market continues to function”, says Vanessa Ahuja, Executive Board Member for Benefits and International Affairs at the Federal Employment Agency of Germany.
Without immigration, the working-age population would fall significantly
A look back over the past ten years shows just how much the employment situation has changed. Between 2014 and 2024, the number of people of working age with German nationality fell by around 3.9 million. At the same time, the working-age population of foreign nationals increased by around 3.4 million. Without immigration, the labour force potential in Germany would therefore already have shrunk significantly.
Foreign workers are driving employment growth
This trend is also reflected in employment figures. Between June 2014 and June 2025, the growth in employment was driven mainly by foreign workers. 43 per cent of employment growth was attributable to third-country nationals – around a third of whom come from the eight countries of origin of asylum seekers – whilst a further 26 per cent was attributable to workers from the member states of the European Economic Area and Switzerland. Around a third of the growth in employment was accounted for by German workers.
"This development can also be attributed to successful integration into the labour market. Refugees have made a significant contribution to employment growth. The number of employees from the main countries of origin of refugees who are subject to social security contributions has more than doubled over the last five years. The progress made in recent years demonstrates the potential that exists, and we must continue to tap into that potential together. Because it is an investment in social cohesion, economic participation and the future of our labour market”, says Daniel Terzenbach, Director of Regions at the Federal Employment Agency of Germany.
Rising labour market participation boosts job creation
In addition to immigration, rising labour market participation has also contributed to the positive trend in employment. The employment rate has risen in recent years for both German and foreign nationals. At the same time, due to the ageing population, employment growth among German nationals is increasingly concentrated in older age groups. In contrast, younger cohorts of workers are increasingly characterised by immigration.
Immigration ensures a supply of specialists in many professions
Immigration also helps to meet labour demand in many professions. Whilst the number of German workers is rising, particularly in highly skilled roles, foreign workers are at least partly offsetting the decline in unskilled and specialist roles. Their share of the workforce in shortage occupations has doubled since 2014, from seven to around 14 per cent.
The growing importance of immigration is also evident at a regional level. In western Germany, German and foreign workers are contributing together to job creation. In many regions of eastern Germany, however, the rise in employment is almost entirely attributable to foreign workers, who are at least partly offsetting the effects of demographic change there.
Admittedly, the economic slowdown has slowed down employment growth, particularly in the manufacturing sector. In the long term, however, demographic change will continue to be a defining factor. Immigration will therefore continue to be of great importance for employment trends and ensuring a supply of specialists in the future.
Further information in the ‘Labour Market in Focus’ section: Zunehmende Bedeutung der Zuwanderung für die Beschäftigungsentwicklung (available in German).