A comprehensive study analyzing German district data from 2007 to 2021 finds that increases in asylum seeker arrivals are associated with business growth in Germany, including a rise in new business registrations and job creation. The research, conducted by economists from Ruhr University Bochum, the ifo Institute, and CESifo Munich, attributes these outcomes to both immediate demand pressures and later labor market integration.
New Businesses and Economic Stimulus
The study identifies two primary channels through which asylum seeker arrivals stimulate economic activity. In the short term, the influx of new residents increases demand for housing, food, and local services, prompting German nationals to open new businesses. This demand-side effect is visible in the year of arrival and persists for up to three years. In the longer term, once asylum seekers are granted refugee status, which is typically two to three years after arrival, their access to work permits enables them to enter the labor market. This supply-side effect contributes to sustained economic growth and supports job creation in both new and existing enterprises.
Widespread Employment Impact Beyond New Ventures
While the study finds that asylum seekers themselves are not the primary founders of new businesses, total employment growth is substantial. Across all sectors, the arrival of asylum seekers leads to the creation of 10.9 full-time jobs per 1,000 inhabitants. This indicates that approximately 75% of the employment impact is realized in established businesses, suggesting broader economic ripple effects. The research also estimates a 0.79% increase in GDP per capita in regions with higher asylum seeker intake, underscoring the overall positive contribution to regional economic performance.
Some Refugees Become Entrepreneurs Themselves
Although, according to the Ifo Institute refugee self-employment stood at 8.1% in 2019 in Germany, there are many cases where refugee entrepreneurs are making a change. British newspaper The New European cited three standout success stories to illustrate this trend: Rahaf Al Lymoni and Tamim Kbarh launched Daffee, a Netherlands-based company producing a caffeine-free coffee alternative from upcycled date seeds, after seeking asylum in 2019. Khaled Shaabam, a Syrian refugee, founded Subul Impact Outsourcing in the Netherlands, which connects skilled refugees with international firms and has provided job opportunities to over 500 refugees; and Julia Boguslavska established the Ukrainian Women in Poland project in March 2022, offering business training and psychological support to Ukrainian refugee women, enabling their economic integration.
Well-designed and executed integration policy and procedures can thus make a real impact in the labor market and Germany – while severely limiting asylum access in recent months – could be a country of best practices in this regard.
