Immigrants fill the gaps

Switzerland is expected to break the nine million population mark this year. Twenty years ago, significantly fewer people lived in this country: 7.3 million.

In the face of rapid population growth, many are asking – again – the question: is immigration worth it? In other words: will the local population benefit if some 74,000 people immigrate each year?

Answer: It depends.

Anyone who owns a piece of land or a house is one of the winners. “The increased demand has multiplied the value of land and real estate,” says Michael Siegenthaler, 37, labor market expert at the Economic Research Center (KOF) at ETH Zurich.

Companies that hired immigrants and were able to develop new products as a result also benefited. The employees of such companies also benefit from this, for example in the form of wage increases. In the end, the winners are the immigrants themselves, whose income has increased through immigration.

Shortage of skilled labor in Germany by us

The losers mainly live on the other side of the border, says Siegenthaler. “A study shows that the emigration of nurses and doctors has had a negative impact on the quality of treatment in southern German hospitals.” Another – silent – ​​loser is the soil in Switzerland: immigration is accompanied by loss of land.

Added to this is the pressure on rents. Those who do not have a home are confronted with rising rents. There are also losers on the labor market, says economist Siegenthaler. “A study in Ticino found some evidence that wages are being squeezed by competition from cross-border commuters.”

And what does immigration mean for the population as a whole?

Gross domestic product (GDP) per capita is often passed on as an indicator. In international comparison, this has not risen exaggeratedly. The conclusion is then: immigration does not pay.

Siegenthaler disagrees. GDP per capita does measure the change in wealth. But: “It only imprecisely reflects many developments relevant to the immigration debate.” GDP per capita does not measure the increase in free time that we have gained in recent years: “We work less, but produce the same amount.”

In fact, the number of hours worked per inhabitant has fallen significantly over the past 30 years: Swiss people work more part-time, have more vacation days – and the number of pensioners in the total population is increasing.

So our prosperity is one of the driving forces behind immigration. “Because we work less, we need more employees,” Siegenthaler analyzes. “In short: more part-time work leads to more immigration.”

BIP does not tell the whole story

GDP per capita does not reflect this increase in prosperity. Moreover, this key figure is influenced by aspects that are not relevant to the immigration debate – “such as international sporting events or pharmaceutical exports”.

Marius Brülhart (55), professor of economics at the University of Lausanne, therefore considers GDP per hour worked a more sensible indicator to measure prosperity. “The number answers the question: How much wealth do we create in one hour of work?”

Since the turn of the millennium, GDP per hour worked has almost always increased – including in the corona years 2020 and 2021. “That shows very robust productivity growth in our country,” says Brülhart.

Here, too, the role of immigration remains open. Because no matter how you look at it, the effect of migration on prosperity is not directly measurable.

However, there are indirect indications of a positive migration effect. An ETH study concludes that immigration leads to higher incomes.

Professor of economics Aymo Brunetti (59) adds: Without immigrants, the lack of skilled workers would have hindered the development of companies. In addition, immigration acts as an economic buffer because it stabilizes consumption in times of crisis. However, the individual hardly feels such effects.

So what’s the conclusion?

Maybe so: some locals get more pay thanks to immigration; others are under pressure from the competition. And: some benefit enormously – including the immigrants themselves.