Germany has seen waves of migration in recent years, sparking debates about whether migrants contribute more to the country’s finances than they take out. A recent study provides an answer: yes, they do—especially second-generation migrants.

The research, conducted by Hend Sallam and Michael Christl, analyzed how much migrants and natives pay in taxes and receive in government benefits. Using 2018 data, the study found that first- and second-generation migrants, on average, contribute more to public finances than natives. First-generation migrants contribute €116 per month, second-generation migrants €94, while natives have a negative balance of -€106 per month.

Age matters

Why? The age difference plays a big role. Migrants tend to be younger and therefore rely less on pensions and healthcare—the two biggest costs for the state. When these factors are controlled for, second-generation migrants contribute about the same as natives, while first-generation migrants contribute less. Barriers like lower job opportunities and language challenges explain this gap.

Second-generation migrants contribute the most during their working years, thanks to better education and higher employment rates. This shows that integration policies—like improving education and job training—pay off in the long run. For a country like Germany, which is facing an aging population, these contributions are essential.

The study also highlights challenges. First-generation migrants could contribute more if they had better access to jobs and social support. Addressing these issues would help migrants thrive and benefit the economy even more.

Germany’s experience shows that migration is not a burden. With smart policies, migrants can boost public finances and help solve demographic challenges. The real question is not whether migrants contribute, but how to help them do so even better.