Approximately 1.2 million refugees arrived in Germany between 2015 and 2016. The national and international public discourse surrounding the arrival of these refugees covers the full spectrum of opinions. These opinions range from sceptical assessments regarding the 2015 influx as a “refugee crisis” to optimistic appraisals considering the immigration of refugees to be a solution to demographic change and labour shortages. These views are often driven by ideology and emotions rather than grounded in evidence. In this paper, we use data from a unique, nationally representative household survey of refugees who came to Germany between 2013 and 2016 to describe who these refugees are, focusing particularly on demographic and skill characteristics relevant for their successful and sustainable economic integration. We also discuss German public policies and institutional environments to promote refugees’ integration. Our descriptive analysis shows that the processing of asylum applications and the overall provision of accommodations, safety-nets, and integration programs by German authorities have advanced the refugees’ integration process, although the initial shortcomings have been widespread. Over the years, German institutions have generally been open to helping refugees and other immigrants gain ground in Germany. However, there are still challenges for policymakers. One such issue is the gender gap that is reflected in the support for female refugees with childcare obligations, which delays their language acquisition and slows their integration. Nevertheless, the empirical evidence has - contrary to the expectations - given no indications that the influx of refugees in 2015 led to a “refugee crisis” in Germany.

In this paper, we analyze the labor market impacts of immigration under flexible and rigid labor market regimes. A general equilibrium framework is developed, accounting for skill heterogeneity and labor market frictions, where unemployed medium-skilled manufacturing workers are downgraded into low-skilled service jobs, while low-skilled service workers might end up unemployed. The analytical analysis shows that medium-skill immigration decreases low-skilled unemployment under the flexible regime, indicating a complementarity effect, while the rigid regime induces a substitution effect, leading to low-skilled unemployment. Moreover, it leads to wage polarization. In a numerical analysis, the economic effects of different migration scenarios are quantified.

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We study how satisfaction with government efforts to respond to the COVID-19 crisis affects compliance with pandemic mitigation measures. Using a novel longitudinal household survey for Germany, we overcome the identification and endogeneity challenges involved in estimating individual compliance by using an instrumental variable approach that exploits exogenous variation in two indicators measured before the crisis: political party preferences and the mode of information measured by the frequency of using social media and reading newspapers. We find that a one unit increase in subjective satisfaction (on the 0-10 scale) improves protective behavior by 2-4 percentage points. Satisfaction with the government’s COVID-19 management is lower among individuals with right-wing partisan preferences and among individuals who use only social media as an information source. Overall, our results indicate that the effectiveness of uniform policy measures in various domains, such as the health system, social security or taxation, especially during pandemic crises, cannot be fully evaluated without taking individual preferences for collective action into account.