The massive inflows of refugees in 2015/2016 have posed great challenges to Germany’s labor market and society. To assess the success of various integration measures, the Federal Labor Ministry commissioned a research consortium led by IZA to conduct a large-scale evaluation study comprising a causal analysis of administrative data, complemented by survey data and a comprehensive implementation analysis.
The final report (available in German language only) presents findings on the implementation, utilization, effects and economic efficiency of the labor market integration measures for refugees in the time period between September 2017 and December 2020. These measures, specified in the German Social Code (SGB II and SGB III), include seven different program types ranging from vocational training to subsidized employment.
Almost all programs were found to be effective in terms of increasing the length of employment spells and reducing the duration of welfare benefit receipt for program participants compared to non-participants. These effects were most pronounced for measures involving employers, such as temporary wage subsidies and introductory company trainings. A cost-benefit analysis already shows a positive fiscal balance for these programs after 40 months, while the fiscal gains of other measures aimed more at long-term integration through education and training are expected to offset their costs within about five years.
Apart from labor market integration, the evaluation found substantially improved social participation, due also to the language acquisition aspect of the integration programs. Women benefit as much as men but are markedly underrepresented among program participants.