On January 11, 2024, the German extreme-right party „Alternative for Germany“ published an article in its digital member magazine afdkompakt.de claiming that immigration costs Germany €6 trillion, which is seen as evidence for the need of remigration. The source for this statement is a study published in January by economist Bernd Raffelhüschen. The AfD’s interpretation of this study is mostly false.
At the beginning of 2024, Bernd Raffelhüschen’s study “Honorable State? Focus on Migration and the Fiscal Balance of Immigration” („Ehrbarer Staat? Fokus Migration zur fiskalischen Bilanz der Zuwanderung”) caused quite a stir in the migration debate. Many right-wing voices see the study as a reason for a tougher and stricter migration policy. This includes the party “Alternative for Germany” (AfD).
Fiscal balance through migration
The statement that migration costs Germany 6 trillion euros is based on a calculation from the Raffelhüschen study. The study uses the generational accounting method for its calculations. Age-dependent payments and receipts (taxes, social security contributions, benefits, etc.) are compared with public finance developments. The fiscal balance then shows a comparison of income and expenditure. In order to include migration, the net payments per capita of nationals and foreigners are compared. Based on this calculation, the study concludes that future migration will result in a negative fiscal balance. This calculation and Raffelhüschen’s statement in Bild — which projects that immigration, if it continues as it has to date, would result in macroeconomic costs of 5.8 trillion euros — form the basis for the AfD-Kompakt article.
However, the AfD views the calculations in the study without context. It ignores the fact that newborn nationals also result in a negative net payment. “Assuming a constant fiscal situation, i.e., unchanged government benefits and tax and contribution rates, children incur higher costs over their entire life cycle than they contribute to cover (negative generational account).” (Raffelhüschen et al. 2024). This fact puts the AfD’s assessment of the study in a different light and reveals the actual message of the research: Germany has excessively high social spending in the long term, which, together with demographic change, could pose a financial threat. The study examines the question of whether migration can counteract demographic change. The calculations show that migrants and newborn citizens result in a negative net payment, and that the problem therefore lies less in migration and more in an overly generous welfare state that lives beyond its means. “The welfare state in its current form is not affordable in the long term, either for the population living in Germany or for immigrants.” (Raffelhüschen et al. 2024).
Solutions for negative balances
In the article in AfD-Kompakt magazine, migration is portrayed as taking something away from German citizens. The study calculates various scenarios in which migration is expected to lead to a positive fiscal balance, including the admission of people with higher qualifications or the promotion of additional labor migration. In both cases, the balance improves, but it is still negative. The study therefore concludes that migration policy cannot bring about a positive fiscal balance, but that the problem lies in the welfare state. In view of demographic change, migration cannot help, but neither is it the main problem for negative balances in the finances. “Accordingly, even a successful migration policy is no substitute for an adjustment of government benefits, especially with regard to age-specific social spending.” (Raffelhüschen et al 2024). This statement from the study is not taken into account by the AfD.
Criticism of the study
Regardless of the AfD’s statement, the methodology of Bernd Raffelhüschen’s study has been criticized from several sides. A new study by economist Martin Werding shows that each migrant contributes 7.100 euros per year to the state. Like Raffelhüschen, Werding looks at migration from the perspective of demographic change. According to him, immigrants can fill the gap in jobs that are lacking in Germany—for example, in nursing or skilled trades. With more people employed in the country, gross domestic product (GDP) grows, generating more revenue for the state through taxes and social security contributions.
Werding criticizes Raffelhüschen’s method of calculation. Raffelhüschen’s study only looks at net state expenditure, which is only increasing due to a growing older population. However, it remains unclear whether the financial stability of the state will improve when future values are taken into account.
Conclusion
Based on Raffelhüschen’s calculations, the statement that migration costs Germany 5.8 trillion euros is true. However, if you look at the article in the AfD magazine, it becomes clear that only the points in the study that are useful for strengthening their own narrative are picked out. Accordingly, the negative fiscal balance of new-born nationals is omitted and the actual message of the study, the criticism of the welfare state, is not taken into account. In addition, there is criticism from many economists (e.g. Jens Südekum or Martin Werding) who question Raffelhüschen’s method of calculation. The points mentioned argue for a mostly false statement.
RESEARCH | ARTICLE © Leonie Helbich | Hochschule der Medien, Stuttgart, Germany
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