Germany needs 288,000 immigrants yearly: How Indians can help fill the gap

Earlier this month, Germany announced it would issue over 10% more professional visas in 2024 to address labour shortages

Looking for a job in Europe? Germany could be an option worth considering. A study by Bertelsmann Stiftung reveals that Germany's economy will need nearly 288,000 immigrants annually until 2040 to address challenges posed by an ageing population. Published on Tuesday, the report says that even if domestic workforce participation among women and older workers increases, immigration is crucial. Without these measures, the number could rise to 368,000 migrants annually to prevent a sharp decline in the labour force.

 

This presents an opportunity for Indian workers. With 273,000 people of Indian origin—including expatriates and German citizens—already residing in the country, Indians represent the second-largest South, South East, East, or Central Asian community in Germany after Afghanistan.

 

 

Earlier this month, Germany announced plans to issue over 10% more professional visas in 2024 to combat labour shortages. On November 17, the government confirmed it will issue 200,000 professional visas next year. Of these, 90,000 will be allocated to Indian skilled workers, a significant increase from the current cap of 20,000.

 

“Germany is open for skilled workers”

 

During a recent visit to India, Chancellor Olaf Scholz spoke about Germany’s openness to Indian professionals. “The message is that Germany is open for skilled workers,” Scholz said, pointing out that nearly 250,000 Indians currently reside in Germany, many contributing to healthcare, IT, and nursing.

 

Official figures reveal a steady increase in skilled Indian workers in Germany. As of February 2024, 137,000 Indians hold skilled positions in the country, compared to just 23,000 in 2015, according to the Federal Labour Ministry.

 

Cost of living

 

If you're planning to move to Germany, you must understand the cost of living. A recent report by University Living, titled European Student Landscape 2024: Beyond Beds and Benches, breaks down the average monthly expenses in German cities.

 

On average, living costs in Germany amount to €1,235 (approximately Rs 1 lakh) per month. Accommodation takes the largest share, accounting for 48.6% (€600). Utilities follow, making up 38.5% (€475), while transportation expenses stand at 6.9% (€85). Miscellaneous costs, such as food, entertainment, and personal care, contribute 6.1% (€75).

 

The total monthly expenses can range between €920 and €1,550, depending on lifestyle choices and city preferences.

 

Why immigration remains critical for Germany’s labour market 

 

“Demographic change, which will pose major challenges for the German labour market in the coming years with the retirement of the baby boomers, also requires immigration,” said Susanne Schultz, a migration expert at Bertelsmann Stiftung. Schultz added that boosting labour participation among locals and current immigrants is important but will not be sufficient to meet the projected demand. 

Immigration needs differ across German states as ageing population rises

 

The demand for immigration in Germany varies significantly across federal states, with some regions facing a sharper decline in workforce numbers than others. According to the Bertelsmann Stiftung report, states like Thuringia, Saxony-Anhalt, and Saarland are expected to experience a workforce decline exceeding 10% by 2040 due to insufficient immigration. In contrast, states such as Hamburg, Berlin, and Brandenburg are likely to see a less pronounced reduction, with declines well below 10%.

 

Structural changes drive regional immigration demand

 

The report highlights that the extent of immigration needed also depends on structural changes in each state. Regions like Baden-Württemberg, Bavaria, Hesse, Berlin, and Hamburg, where workforce demands are projected to increase significantly by 2040, will require more international workers to offset local shortages. These areas are expected to experience a structural increase in workforce demand that surpasses workforce reductions caused by demographic shifts.

 

Rising retirement numbers reshape the labour market

 

The ageing population is another critical factor driving immigration needs. By 2040, the proportion of Germans aged 65 or older will rise from 22% in 2020 to nearly 28%. Ralph Heck, chairman of the Bertelsmann Stiftung Executive Board, said, “Despite all the regional differences, the increasing ageing of German society will be evident in almost all of the country’s communities. Targeted strategies are needed now to build infrastructure suitable for older generations and to overcome the resulting economic challenges.”

 

The report estimates that the number of individuals aged 65 to 79 will grow from 12.3 million in 2020 to 16.2 million by 2035, increasing their share of the population from 14.8% to 18.4%. The population aged 80 or older will also see a significant rise, climbing from 5.8 million in 2027 to 7.7 million in 2040. By then, over-80s will make up 9.2% of the total population.

 

Ageing Germany

 

The ageing trend is further underscored by shifts in Germany’s median age, which is expected to rise nationally by 1.2 years by 2040. Regional disparities in median age will remain stark, with Hamburg and Berlin expected to have the youngest populations at a median age of 43 years. In contrast, four of the five eastern states will have median ages between 52 and 53 years. At the district level, the gap widens further, with the youngest median age in Heidelberg (38.8 years) and the oldest in Greiz (57.3 years).