The Integration Puzzle What a Million Refugees Mean for Everyday Life
Part 18: The Refugee Bill
Matthias Lücke, 55, is a professor at the Institute for the World Economy in Kiel.
Mr. Lücke, what is this all going to cost?
The figure for this year is 25.7 billion. It's a kind of price tag. That's the amount Germany will have to come up with in 2016 if the number of refugees coming to the country continues as it is -- including costs for housing, language courses, social services and integration.
Matthias Lücke, an economist at the Institute for the World Economy in Kiel, has computed all the costs, conducting a simulation that calculates a price tag with many unpredictable variables. Among Lücke's areas of research are issues like international labor migration and globalization and income distribution. He has a fundamental interest in what happens when migrants come to Germany. Do they help the country or do they harm it?
Germans are obsessed with numbers and statistics, and that is becoming apparent once again in the refugee crisis. They want to know costs, quotas and upper limits. They want to know what to expect, and numbers provide the illusion that the situation is somehow under control. In fact, her refusal to name these figures is one of the reasons Chancellor Angela Merkel is having so much trouble right now.
But Lücke's answer to the question of what the Germans and their generosity is going to cost -- in terms of its overall macroeconomic impact -- is 25.7 billion, for this year alone. For the year 2022, Lücke has even calculated a sum of 55 billion. Those are big numbers, and none of Germany's other major economic institutes has cited larger figures. University of Freiburg Economics Professor Bernd Raffelhüschen calculates a figure of 17 billion, Munich's IFO Institute puts costs (for 2015) at 21 billion and the Mannheim-based ZEW estimates 30 billion.
Lücke's calculations are based on a number of assumptions. For example, his institute forecasts the arrival of 1.4 million refugees in 2016, 400,000 more than in 2015 -- a figure that includes family dependents getting reunited in Germany. In 2017, 1.2 million people would arrive, with the number in Lücke's scenario dropping to a million a year from 2018 to 2020 and then remaining constant.
Lücke says that it costs around 13,000 a year to provide for a single refugee, a figure that includes not only monetary benefits, but also administrative costs for BAMF, the costs of German language courses, as well as the administrative expenses of the municipalities and states.
Decisive in these calculations is the percentage of people who remain in Germany. Around 30 percent of refugees tend to return to their home country within the first three years. Around 20 percent are bestowed with the German legal status of "tolerated," meaning that they do not qualify for asylum but will also not be deported from Germany. Of the original refugees, about 68 percent continue to receive government welfare payments after the first two years, with that figure shrinking to 33.5 percent after five years and down to 17.5 percent after 10 years.
Based on these factors, Lücke predicts costs of 37.4 billion in 2017 and the aforementioned 55 billion for 2022. That would be just under 2 percent of current GDP. The 25.7 billion for this year is equal to 0.85 percent of GDP. Lücke considers that figure to be "manageable," measured against what Germany was able to handle during the reunification of West and East Germany. Germany's more prosperous states have paid more than 2 trillion in transfer payments to the states that formerly belonged to East Germany since reunification in 1990.
- Part 1: What a Million Refugees Mean for Everyday Life
- Part 2: Integration 101
- Part 3: Are Refugees More Violent?
- Part 4: Frustration and a Lack of Resources
- Part 5: Teaching Refugees to Swim
- Part 6: 'A Challenge Like No Other'
- Part 7: The Doctor's Advice: Learn German and Be Patient
- Part 8: A 1.5 Billion Burden for the Healthcare System?
- Part 9: Dancing Away Stereotypes and Prejudice
- Part 10: The Midwife's Migraine
- Part 11: Germany Will Need 20,000 New Teachers for Refugees
- Part 12: 'We Need Time'
- Part 13: 'We Will Only Manage This If We Have the Infrastructure'
- Part 14: 'We Will Undergo a Multicultural Transformation'
- Part 15: Refugees at Our Doorsteps
- Part 16: 1.09 Million Refugees Registered in 2015
- Part 17: Policing the Refugee Camps
- Part 18: The Refugee Bill
- Part 19: Integration Will Be a Task for Decades to Come
- Part 20: 'An Open Economy Would Be Unimaginable without Immigration'
- Part 21: BMW Courts Refugees
- Part 22: A Michelin Star and Refugees
- Part 23: 'What Is a Petroleum Technician?'