Germany's Federal Employment Agency reports persistent pay gap between German and foreign workers

A separate study by the Institut für Arbeitsmarkt- und Berufsforschung (IAB) shed light on the underlying causes. Lohnunterschiede zwischen Eingewanderten und Einheimischen ließen sich demnach zum großen Teil darauf zurückführen, "dass Eingewanderte seltener in hochbezahlten Branchen oder Positionen beschäftigt sind". In other words, migrants are disproportionately concentrated in lower-paid sectors and roles rather than being paid less for identical work.

What the IAB study found

The Federal Employment Agency stressed that educational attainment alone did not close the gap. Even when comparing workers with similar qualifications and similar full-time employment patterns, a residual pay difference persisted, suggesting that language skills, network effects, recognition of foreign credentials and discrimination all play some role. The agency did not, however, quantify each factor individually in the summary released.

The figures are likely to draw renewed political attention in Berlin. The Bundestag has debated migration and labour-market integration repeatedly in recent years, and René Springer is among the lawmakers who have publicly scrutinised pay data. Advocacy groups and employer associations are expected to weigh in on whether the structural concentration of migrant workers in lower-paying industries warrants targeted integration measures or upskilling programmes.

Economists cautioned against reading the headline gap as evidence of uniform wage discrimination. The IAB finding that occupational sorting explains a large share of the difference is consistent with international research, which generally attributes a majority of migrant-native pay gaps to differences in industry, occupation and hours worked, with the remainder split between unobserved skills, credential recognition and possible employer bias.

Political and economic context

For Germany's wider labour-market debate, the data underline a structural challenge: the country continues to rely on immigration to fill shortages in care, construction, hospitality and logistics — sectors that pay below the national median. Closing the Verdienstlücke will therefore depend less on anti-discrimination enforcement alone and more on pathways that move migrant workers into higher-paying fields, the IAB researchers suggested in their accompanying commentary.

The Federal Employment Agency said it would continue to publish annual updates on the Verdienstunterschiede and on related indicators such as unemployment and underemployment among foreign-born workers. It also pointed to existing advisory services aimed at helping migrants obtain credential recognition and to language courses co-financed by the federal government and the BA itself.

What comes next

Taken together, the two studies present a nuanced picture: a measurable and persistent pay gap, a clear dominant cause in occupational sorting, and a smaller but real residual that policymakers say still needs to be addressed through both integration policy and enforcement of equal-pay rules.