IW Analysis: Eastern Germany Will Lack Workers Long-Term Without Immigration

Above all, services in the medical, nursing, and skilled-trades sectors can hardly be automated and therefore depend on sufficient staff. Here, the IW sees the greatest bottlenecks heading toward the eastern German regions.

IW economist Wido Geis-Thöne points out that immigration has already helped to ease the gaps in the labor market in recent years. Without further immigration, however, the situation will worsen significantly, as many employees will simultaneously be retiring.

Immigration as a Decisive Factor

The study also shows that the decline in the working-age population is not only an eastern German phenomenon, but sets in earlier and more strongly in the new federal states. In Saxony-Anhalt and Mecklenburg-Western Pomerania, demographic development is already clearly visible today.

Across Germany, the IW assumes that without immigration the number of working-age people will fall, while demand for workers rises in many sectors. The imbalance between supply and demand in the labor market will thus increase.

For the affected regions, the development also means a challenge for public finances, as fewer working people are available to finance pensions, long-term care, and healthcare. The IW sees this as a structural risk that requires political responses.

IW Demands: Steering and Greater Labor Force Participation

The IW study therefore argues for targeted steering of immigration as well as measures to increase labor force participation among older employees and women. Investments in training and continuing education could also help cushion the shortage of skilled workers.

At the same time, the IW experts emphasize that immigration alone cannot solve the problem. A package of different measures is needed to secure the economic performance of the eastern German federal states in the long term.

Overall, the analysis paints a picture in which eastern Germany faces a double challenge: the outmigration and aging of its own population, as well as a growing need for skilled workers in sectors that are hardly amenable to automation.