Human Capital in Germany

One of the underlying tendencies supporting the ongoing and rather rapid demographic transition in Germany apart from rising life expectancy and continuosly falling and very low fertility rates is the lack of inward migration. A recent post over at Demography.Matters compiles a slew of references which serve well to illunimate the situation. Consequently, the German statistical office reported recently that inward migration in 2006 was a mere 23.000 which in a context of +80 million people pretty much equals status quo. More worryingly the number of  23.000 is obtained by substracting the  662.000 immigrants from the 639.000 emigrants. Given the notional evidence of the high value added component of outward migration from Germany there is evidence to suggest that the net value added from the migration in and out of Germany could be trending in the wrong direction from the point of view of economic growth. A recent informative article from the Independent has some interesting info ... 

For a nation that invented the term "guest worker" for its immigrant labourers, Germany is facing the sobering fact that record numbers of its own often highly-qualified citizens are fleeing the country to work abroad in the biggest mass exodus for 60 years.

Figures released by Germany's Federal Statistics Office showed that the number of Germans emigrating rose to 155,290 last year - the highest number since the country's reunification in 1990 - which equalled levels last experienced in the 1940s during the chaotic aftermath of the Second World War.

The statistics, which also revealed that the number of immigrants had declined steadily since 2001, were a stark reminder of the extent of the German economy's decline from the heady 1960s when thousands of mainly Turkish workers flocked to find work in the country.

To make matters worse for Germany it seems as if some low value added sectors are suffering as well although of course there must be ways in which those lovely asparagus can be imported from elsewhere. However, it does seem imprudent in Germany's case to actually attempt to impede Eastern Europeans coming to Germany.

Germany’s decision to restrict the working rights of east Europeans is hitting consumers where it hurts – their asparagus steamers.

After this year’s warm, wet spring, the sandy plains of central Germany should have yielded an asparagus vintage for the history books. Instead, entire fields of the delicacy are rotting unplucked.

On a balanced basis it of course difficult to say what the real impact is here. The notion of brain drain is clearly something to watch and it seems as if Germany, not least because of institutional and cultural reasons, might not be a comparatively attractative place to to migrate for high value added labour. The long term trend of this is then of course exacerbated by the general demographic projections for Germany.