1. NickMacioce
The Complex Relationship between National Immigration Policies and
Economics
Immigrationisaglobal issue anditisn’tgoinganywhere.The topicof immigrationdominates
the headlinesinmanydifferentways.From the deadlyplightof Syrian refugeestothe struggle of finding
placesforthousandsof newimmigrantsarrivingtoa country,the numberof questionsthatcome along
withimmigrationare seeminglyendless.It’sveryclearthatlarge numberof immigrantscomingtoa
countrywill have aneconomicimpact,butwhat will itbe?Many Europeancountriesare relianton
migrantworkersto keeptheireconomiesproducingatfull capacity.Withoutimmigrantworkerssome
countrieswouldsufferlarge losses,yetsome immigrantscanpresentathreatto a country’ssense of
stabilitybypotentiallytakingawayjobsandresources.Immigrationpolicyisahard thingto develop
effectivelyandthereforeitcan’talwaysrepresentthe exactneedsof acountry.Whendevelopinga
policy howdoesa nationtake intoconsiderationall of the factorsthataffectsomethingsascomplex as
immigration?Ihave lookedattwosimilar,yetdistinctcountries, SwitzerlandandGermany, tosee how
they’ve developedtheirpolicies.
SwitzerlandandGermanyare twoof Europe’sand the world’sstrongesteconomies.They’re
knownfortheirstabilityandefficiencybutthey’re alsoverydifferent. Bothof theireconomiesare
influencedbyimmigrationandinternationalworkers,buta bigdifference betweenthe twoistheir
policiestowardsimmigrantsandthose policiesinturn, have aneffectontheirnational economies.
Germanyis currentlyinstitutingprogramstoattract more immigrantsandhelpthemadjusttolife in
Germanywhile Switzerland,justlastyear,proposedandpassed areferendumlimitingimmigrationto
the country. There are manycomplex issuesthataccountforthe differencesinpolicythat these
countrieshave including theirhistorical backgrounds,the influence of the EuropeanUnionandtheir
currenteconomicneeds,amongothers.

2. Historical Perspective andCurrent Policies
Switzerland
Switzerlandhashistoricallybeenanisolationistcountry.Since the sixteenthcenturythey’ve
avoidedpartakinginall majorconflictsandare geographicallylandlockedbythe Alps.Thissense of
isolationhasleadthe Swisstobecome veryproudandindependent.One of the mostobviousexamples
of thisistheirrelationshipwiththe EuropeanUnion.Switzerland,althoughhavingmultipleagreements
withthe EU and formerlyhaving openbordersforfree movementof people,hasneverwantedto
officiallyjointhe organization.Switzerlandhasprideditself onself-reliance andindependence,instead
of the apparentinterdependence of the EuropeanUnion.
Accordingto the SwissForumfor Migrationand PopulationStudies, one ineveryfourwage
earnersinSwitzerland isforeign.Thisisdue tothe free movementof people accordthe Swisshave with
the EU and due to the economichealthandavailabilityof jobs.The majorityof these workers are Italian
workersinthe southbut the northernparts of the country have theirfairshare of immigrantsaswell.
Construction,research,andpharmaceuticalsare industriesthatrelyheavilyonforeigners.Manyof the
foreignworkersinthe Northare qualifiedGermanspecialistswhocrossthe borderdue tothe better
jobsavailable inSwitzerland.Howeverthissystemof foreignworkersinSwitzerland isnow threatened
due to the reformpassedbythe Swisspeople in2014.
In 2002 Switzerlandsignedthe firstof several free movementof people accordswiththe
EuropeanUnion.The deal includedallowingEuropeannationalstobe able tochoose theirplace of work
anywhere withinthe signingregions.Thishasbeenextendedacouple of timessince thentoinclude
newEU memberstates.Outof thisdeal,Switzerlandgottrade agreementswiththe EU andSwiss

3. scientistswere eligible forgrantsandable to leadinternational researchprojects.Forthe lastseveral
years,about77,000 immigrantscame to the countryannually.Switzerland,arelativelysmall country,
withpopulationof justover8 millionnow consistsof roughly23% immigrants,accordingtothe Swiss
Statisticswebsite.InFebruaryof 2014, a referendumpassedinSwitzerlandthatimposesquotasonthe
numberof foreignersthatcancome to the country.The referendumbarelypassedwith50.3% of the
votersapprovingit,accordingto the BBC. It waspushedforheavilybythe SwissPeople’sPartywho
claimsthat the immigrantswill take resourcesandbecome adrainon the systemthatthe Swisshave
created.The SwissPeople’sPartyplayedonthe fearsof the Swisspeopleclaimingthatif immigration
wentuncheckedtheywouldtake awayfromwhatthey’ve beenable toaccomplish inSwitzerland.
The referendumstatesthatquotasmustbe put onthe numberof immigrantswhocome to
Switzerland,thisincludesbothcross-bordercommutersandasylumseekers. Itwouldalsoreinstate
preferencesgiventoSwisscitizensduringajobapplicationprocess.The restof the detailsonthe
implementationof the vote were fairlyvague.The majorityof businessleadersandpoliticiansstrongly
advocatedagainstthe referendumsayingthatSwitzerlandneedstheseworkersforvariousreasonsand
that losingthemwouldcostthe economy.Accordingtothe OrganizationforEconomicCo-operationand
developmentin2013, migrantsboostedthe Swisstax coffersby6.5 billionfrancs,whichisroughly1.9%
of the GDP, disprovingthe ideathatimmigrantswere adrainon the country. Thiswasn’tenoughto
convince the votersthough,astheynarrowlypassedthe referendum.
Thisnewpolicyisindirectconflictwiththe bilateral agreementsoriginallypassedin2002 and
there are consequencestothat. Swissscientistsnolongerhave autonomywithinternationalresearch
programs,whichisparticularlyhurtful because these programsofferedhighratesof return.Switzerland
nowhas three yearsto attemptto renegotiate itsbilateralagreementswiththe EUor theymustrevoke
them.The Swissnoware inthe awkwardpositionof attemptingtoinstituteapolicythatwill behoove
themwhile alsoappeasingthe EU to the pointof not losingtheirbilateral agreements.

4. While Switzerlandwill trytoreworktheirbilateral agreementswiththe restof the European
Union,it remainstobe seenhowlenientthe restof the continentwill be withSwitzerland.Switzerland
has a strong andstable economybutthey’re averysmall countrycomparativelyandtheyseemeven
smallerwhen consideredinthe contextof the wholeEuropeanUnion.Thismeansthatnomatterwhat
Switzerlandofferstothese negotiationsthey’re hardpressedtogetwhattheywantwhentheycan be
diplomaticallyoverpoweredbythe othercountries.One recentexampleof Switzerlandbendingtothe
EU wouldbe the uncappingof the SwissFranc.Historicallyacapped,stable currencyinJanuarythe
Swisswere forcedtoremove the capon it whentheythoughtthe Central EuropeanBankwassetto
printmore Euros thenthey couldhandle.SoalthoughSwitzerlandhasalotto offerto these discussions,
theyare still one countryversusmany.
Germany
Germany,an EU member,hasa verydifferentpolicytowardsimmigrants.Inthe lastseveral
years,Germanyhas become the number one destinationforimmigrantsinEurope andthe numbertwo
destinationinthe worldtothe UnitedStates. There are currently7.6 Millionforeignersregisteredas
livinginGermanyandin2013, Germanyexperienced anetinflux of 437,000 people,mostof them
comingfrompoorereasternEuropeancountries.Forexample,HungaryandPolandare EU members
whose citizenshave free movementtoworkinotherEU countries somanycitizensfromthese countries
come to Germanyin searchof betteropportunitiesthan theyhave intheirnative countries.Germany
has an agingpopulationanda lowbirthrate.For thisreasontheyneedimmigrantstofill jobsthat
otherwise wouldgoempty.
Germany’scurrentlabormarketis benefittingfromthismostrecentwave of immigrationbutit
isn’ta totallynewconceptinGermany.AfterWorldWar, TwoGermanysingedbilateral agreements
withseveral underdevelopedEuropeancountriesallowingforimmigrantsfromthese countriestocome

5. to Germany inorder to workand save up moneybefore returningtotheirhome countriesandhopefully
buildingthemup.Germanydevelopedataremarkable pace afterthe war and experiencedalabor
shortage.Thispolicyof Gastarbeiters,orguestworkers,wasbotha wayfor Germanyto have sufficient
laborand alsoit wasseenas a form of developmentalaid.One of the principlesof the program wasthat
these workerswouldgobackto theirhome countriesandtheywouldbe betteroff fromawealthierand
potentiallybettereducatedworkforce.
Thispolicy isknownas “Wilkommenskultur”whichtranslatestowelcome cultureandincludes
several programs.These programs includemakingiteasiertoobtainpermanentresidence inthe
countryand providingGermanlanguage andcultural integrationclasses.Immigrantswhoneedthe
classespaya discountedrate inan attemptto helpthemacclimate totheirnew surroundings.People
wishingtotake the classpay only1.2 Euros perhour of instructionthattheyreceive andthe Federal
Office forMigrationandRefugees paysthe restperthe Federal Office forMigrationandRefugeesof
Germany.Thisprogram wasstartedin 2005 and the researchdone thusfar has shownthatthe classes
are working.
Impacts
Switzerland
One of Switzerland’sbiggestindustries, pharmaceuticalsisone thatalsoreliesheavilyonthe
contributionsof internationalworkers. BloombergBusinessreportedin2014 that 45% of the
researchersinSwitzerland’spharmaceutical industry were international. PharmaceuticalsinSwitzerland
account forroughly30% of the country’sexportationsand5.7% of the country’sgrossdomesticproduct
(Vaterlaus3).Basel,Switzerland’sthirdmostpopulouscity,iswidelyregardedasthe headof the
pharmaceutical industryinSwitzerland.Itislocatedwhere the Swiss,French,andGermanbordersall
meet.ThisnaturallymakesitaveryconvenientspotforFrenchandespeciallyGermanworkerslooking

6. to enjoythe highersalariesSwitzerlandhastoofferwhilestill takingadvantage of the lowercostsof
livingintheirhome countries.
Due to Switzerland’srecentreferendumonimmigration,the pharmaceutical industrycouldbe
jeopardizedmovingforward.Althoughthe referendumwasn’tspecificabouthow immigrationwouldbe
limitedwithregardstocross-borderworkers, itwill still have adetrimental effect.Anycutting-edge
industryheavilybasedinresearchisreliantonrecruitingthe sharpestmindsavailabletothemandthis
newpolicywill likelyprohibitSwissfirmsfrombeingable tothis.There’saprovisioninthe law stating
that prioritymustbe giventoSwisscitizensduringthe applicationprocess.Thiswill notbe anoptimal
situationsince itwill leadtothe hiringof peoplewhomaybe lessqualifiedsimplybecause theyhave
Swisscitizenship.Thiswill alsobe adeterrenttoqualifiedinternationalworkers.Assumingaforeigner
couldbe hiredby a Swisspharmaceutical company,itissafe toassume theywouldalsocarryoffersfrom
othercountries.Giventhe uncertaintyregardingtheirpotentialfuture employmentinSwitzerland,it
seemsunlikelythey’dchoose toplanttheirrootsthere whentheycouldhave anequallyprestigious
positionelsewhere.
Germany
Germanyhas institutedthesepoliciestocontinue toattractimmigrantsbecause thusfarit has
beenverybeneficialfortheireconomy,especiallyintheirmanufacturingsectors. Germanyhasone of
the lowerbirthratesin Europe andis experiencingaskillsgap.Theyneedwell-educatedlaborand
immigrationisaperfectavenue togetitthrough.Of the immigrantsarrivingagedbetween20and 65,
29% have graduate degreescomparedtojust19% of native Germans.Inaddition,10% of these degrees
are inengineering,informationtechnology,mathorscience whichcomparestoonly6% of German
degrees(BloombergBusiness).Thisinfluxof skilledworkershelpsGermanfirmsproduce athighlevels
and more of themcould helpGermanproductionfurther.A 2014 reportby Ernst andYoung estimates

7. that a shortage of qualifiedlaboriscostingsmall andmid-size Germanfirmsroughly31 BillionEurosa
year.For thisreason,the Germangovernmentisimplementingpoliciestoattractmore immigrants. The
goal of this “Welcome Culture”programisnotonlyto attract more skilledimmigrants,buttohelpthem
adjustwhentheyarrive inGermany.
Accordingto a researchstudywrittenbyDr. NinaRother,Susanne LochnerandKarinSchuller
93% of people takingthe classimprove theirGermanlanguage skillsmarkedly.The studywascarried
out between2007 and 2011 andcompared4,000 immigrantswhohadtaken the course witha control
groupof immigrantswhodidnot.The resultsfoundoverwhelminglythatthe oneswhotookthe class
improvedtheirlanguage skillswhichmade themmuchmore comfortable inGermany andfeltmore
attachedto Germanyas theirhome (Lochner3).This level of comfortfromthe classes createsan
attachmentto Germany since they’re now betterable toconnectwiththeirsurroundingsandalso
preparesthe attendeesmuch betterforatransitionintothe labormarket.
Other Complications
Althoughone economicaspectof immigrationishow the immigrantsfactorintothe labor
marketand howthe firmsof the countrybenefitfromthe influxof workers,anotherequallyimportant
aspectis howthe immigrantsspendtheirmoneytheyearn.One of the biggest,orat leastmostwidely-
publicized fearsof anti-immigrationadvocatesisthatthe immigrantswill come in,workforless thanthe
citizensandundercuttheirjobs.Thisisknownas split-labormarkettheoryandalthoughitisapplicable
inmost casesit isn’tthe onlyconcern.
The real issue fora national economyisimmigrantworkerscomingin,earningwagesandthen
investingtheirmoneyoutside the country. Workerssendingmoney backtotheirhome countriesis
knownas remittance andcompeteswithinternational aidasthe largestsource of fundingfor
developingnations.Anotherconcernisthat if these immigrantsare only“guestworkers”theywon’tbe

8. inclinedtoinvestlongterm intheirnewhome. ChristianDustmanandJoseph-SimonGorlaschfromthe
Centre forResearchand Analysisof Migrationaddressthisintheirpaper TheEconomicsof Short-term
Migrations.Tenyearsaftera batch of immigrantsarrivesabout50% of themwill have returnedtotheir
home country (Dustman6). Thiscan be pre-plannedora resultof immigrantexperiencesafterarriving.
Eitherway,it can have bigeconomicimplications.
Withthe EU’s free movementof people accords,it’scommonforpeople frompoorer,Eastern
Europeancountrieslike Polandtocome to a thrivingcountryworkforseveral years,builduptheir
savings,andgo back to theirhome countryto enjoyhigherpurchasingpower.Germany,withtheir
Wilkommenskultur,istryingtoencourage more permanentmigrationsinsteadof the temporaryones
theyusedinthe sixties.If the 437,000 immigrantswhocame to Germanylast yearwere able tofindjobs
and are nowspendingtheirGermanwagesoncars,housingandotherlongterm investmentsthe
benefittothe country’seconomywouldbe huge. Thisiswhythe Germanlanguage classeslooktohelp
immigrantsbecome comfortable inGermany;notjustforthe reasonof helping immigrantsacclimateto
the labor market,butto make Germanytheirhome.
Since many of the internationalSwiss-workersare crossborderworkersSwitzerlandisreceiving
much fromthem.Thisisa factor thatleadto the passage of theirrecentreferendum.Split-labormarket
theoryalreadyexplainsthe tensionsarisingfromlocal workersandimmigrantones.Whenyoufactorin
where the moneywill ultimatelygo,itbecomesclearer whyoverhalf of the Swisswouldvote fora
seeminglypreposterousreferendum.
Howeverthisnewsurge inimmigrationhasn’tbeenwithoutitsdifficulties.Althoughmany
immigrantstoGermanyare well-educatedandpreparedforcareers, some are not.Many people come
fromotherEU stateswiththe hope of findingworkorbenefitsinGermanyunavailable tothemintheir
home countryand can’t do so.Accordingto The BBC’s JennyHill in2013, sixteenmayorswrote tothe

9. federal governmentaskingforhelpwithunemployedmigrantswhowereoverwhelmingtheircities.
AngelaMerkel,the Chancellorof Germany, haspromisedtotryto cut downon fraudulentbenefitclaims
and assistthe overwhelmedtowns,butthishighlightsakeypitfall of the EU:free movementof people is
guaranteedbythe Schengentreatyandthere isn’ta whole lotacountry can do.
Thishighlightsanotherfundamental differencebetweenGermanyandSwitzerland.Berlinisby
no meansa poor citybut walkingthroughthe streetsyoucansee beggarsnonetheless.InSwitzerlandit
isillegal tobegandrefugeeswhoclaimasyluminSwitzerlandwill be providedforbythe governmentfor
a periodof time.Thisis whySwitzerlandisveryhesitanttoallow somanyimmigrantsintotheircountry,
especiallythese dayswhenmanySyrianrefugeesare arrivinginItalyandcouldworktheirwayup to
Switzerland.
Switzerland’sconstitutiondeemshealthcare afundamental rightandtherefore althoughitis
difficult,undocumentedimmigrantscanaccessit throughnon-profithealthcare providers,public
universityhospitalsandpublic,specializedhealthcare providers.Sophie Durieux fromthe WHOsays
that thishealthcare is byno meansthe reasonthat people immigratetoSwitzerlandhoweverthe
votersare fearful of whatcouldhappenif toomanypeople were toarrive.Documentedimmigrantsto
Switzerlandare eligible forunemploymentbenefits.Switzerlandisarelativelytinycountry,witha
populationof about8 million.Therefore, itwouldbe impossibleforthe Swissgovernmenttobe
expectedtotake care of the countlessrefugeesarrivingandthere’snowayto secure jobsforall of them
either. So,althoughcurrentimmigrantsare nota drainon theirsystem,Swissvotersfearitcouldgetto
that pointif leftunchecked. Due toSwitzerland’sprocessof takingcare of those whoarrive intheir
country,theyhave to be verycareful abouthow many people theyletin. InGermany,unemployed
people,bothcitizensandimmigrants,canbegonthe streetsandthe governmentisn’tresponsible for
providingforthemsopeople cancontinue toflow inevenif there won’tbe jobsorresourcesforthem.

10. Anytime acountryhas such an openimmigrationpolicyitcanleadto the rise of far-rightgroups
lookingtocapitalize onpeople’snationalistsentimentsandGermany isnoexception.PEGIDA,or
PatrioticEuropeansagainstthe Islamizationof the West,isa radical groupin Germanythat hasgained
groundrecently.Ralliesbythe groupinnotable citieslikeDresdenhave attractedlarge crowdsand
althoughmanyGermansare putoff by the group’sextremisttendenciesthere’salarge sentiment
amongGermans thatthey’re losingtheirgripontheircountry.Accordingtoa recentSPIEGEL poll,34%
of Germansbelieve thattheircountryisbecomingincreasinglyIslamic.Thisbacklashfromextreme
groupsthenaltersthe way the currentadministrationenforcespoliciesbecausethey’rewaryof losing
publicsupport,especiallyif anelectionisupcoming. Thispresentsadamningalternative:eitherthe
currentpoliticiansbendtothe people sayingthatthe policytowardsimmigrationistooopentoappease
the massesor theyrisklosinggroundtothemand havingthe extremistsgainsome sortof publicoffice.
Conclusion
Althoughonthe surface immigrationpolicyanditseconomicresultsseemverystraightforward
the issue isquite complex.Everyactionanationchooseshasconsequencesandeveryactionitdoesn’t
take alsohas consequences.Howacountrybalancesthese repercussions dependslargelyonitscurrent
needsandhistorical perspective. We’veseenthisthroughthe Swisspeople’swillingnesstojeopardize
manyimportantaspectsof theircountry andthroughGermany’swarm receptionof immigrantsdespite
inevitable difficulties.There are manylayerstoconsiderwhendevelopingapolicyanda country will
nevercompletelyprioritize one anddisregardanother.Theywill weightone concernasmore or less
importantlargelybasedontheirunique situation.These complexitiesare the reasoncountriesoften
timesare unable todevelopwhatisperceivedasthe perfectsolution.Whensomanyfactorsare being
consideredthere canbe nosolutionthatperfectlysatisfieseverylayer.

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