How Can Refugees with a Low Level of Education Participate in the German Labor Market?

The project “Skilled workers of the future or marginalized in the long term? Integration of marginally qualified refugees“ (“Fachkräfte der Zukunft oder langfristig marginalisiert? Möglichkeiten zur Integration von geringfügig qualifizierten Geflüchteten”) with participation of Dr. Christoph Sajons, head of the research unit “Labor market and self-employment” at the Center for SME Research and Entrepreneurship (ifm) at the University of Mannheim, tries to answer this question.

According to the study, an advanced level of German and a secure residence status, but, first and foremost, discipline and motivation are decisive to get a placement for a vocational training. For older refugees with relevant work experience, becoming self-employed may be worth looking at. By becoming self-employed, many refugees can avoid structural impediments and they are not stigmatized on the labor market, even if they are forced to end their self-employment.

In two separate studies of the project, which is funded by Stiftung Mercator, researchers analyzed dual vocational training and self-employment as ways to enter the labor market. In cooperation with the Chambers of Commerce and Industry (Industrie- und Handelskammer (IHK)) and the Chambers of Trade (Handwerkskammern (HWKs)), the researchers conducted a survey among more than 1,0000 companies in the South of Germany which offer vocational training. Despite the lack of skilled workers, less than a third of the companies has hired refugees (29 percent) and only 8 percent has made use of consulting services on how to integrate refugees. The companies were worried about the refugees’ long-term engagement, their residence status, and the communication with other employees. “Soft factors” such as discipline and motivation, which can be identified by looking at internships or a low number of absence days during secondary education, were very important.


The second study tries to answer the question whether self-employment is an alternative way for refugees and immigrants to enter the labor market or a one-way-street (“Selbständigkeit von Geflüchteten und Zugewanderten. Alternativer Weg in den Arbeitsmarkt oder berufliche Sackgasse?”) and shows that, from 2010 to 2020, migrant founders were slightly more likely (54 percent) to end their self-employment during the first three years than founders born in Germany (47 percent). If they were still self-employed after three years, they had a higher average net income per month than dependent employees (slightly more than 2000 euros vs. 1650 euros). Three years after they had tried to set up their self-employment business, even the entrepreneurs who had failed had a higher net income per month (around 1,800 euros) than dependent employees. In an application experiment, the Mannheim research group, headed by Dr. Sajons, also found out that a previous self-employment did not lead to stigmatization on the labor market. Compared to a period of unemployment, the chances in application processes were significantly higher for those who were previously self-employed.