Foreign workers well integrated in Swiss job market: study

Foreign workers quickly integrate into the Swiss workforce, earning more than their Swiss peers within five years after arrival, a new study shows.

Foreign workers well integrated in Swiss job market: study
File photo: AFP

The study commissioned by Switzerland’s State Secretariat for Economic Affairs (SECO) found little evidence that foreign workers have become a burden on the Swiss system since the country's employment market was opened up to people from the European Union and European Free Trade Association (EFTA).

Conducted by researchers at the University of Zurich and the University of St Gallen, the newly-published report (in French here) measured how successfully foreign workers integrated into the Swiss job market in the period 2003 to 2013.

It did this by comparing both the income and employment rate of foreign workers aged 25 to 55-years-old who had spent at least five years in Switzerland with a control group of Swiss workers.

Salary gap

It found that foreign male workers earned 6.4 percent less than their Swiss peers when they arrived in Switzerland but actually made 1.2 percent more after just one year. After five years, they were earning 1.9 percent more than the control group of Swiss men.

The authors of the study said it was not possible to draw conclusions on why foreign male workers’ salaries caught up with their Swiss peers, but speculated better language skills, a larger professional network and a deeper understanding of the Swiss job market could all play a role.

Read also: This is how much people in Switzerland earn

The authors also noted that changing jobs was also likely to have played a “not negligible” role in increasing salaries, given opportunities for advancement within the same firm were limited.

They also noted that a small number of high-earning executives may have skewed the results but said that a breakdown of the data showed foreign workers with lower levels of education were also catching up with Swiss workers.

For women, the difference in salaries was much more pronounced. Foreign female workers earned 0.9 percent more than Swiss women when they first arrived in Switzerland and after five years, these women were earning a full 20.8 percent more than Swiss women.

Employment rate divide

For foreign male workers, the employment rate was 16.3 percentage points lower than their Swiss counterparts on arrival in the country but that gap had narrowed to 3 percentage points after five years, with the difference down to higher unemployment rates among foreign male workers.

In the case of women, the gap remained larger. The employment rate for foreign female workers was initially 26.8 percentage points lower than for Swiss women and was still 12.3 percentage points lower after half a decade.

Read also: Number of highly-qualified immigrants soars in Switzerland

Explaining this gap. the study authors speculated were more likely to have come to Switzerland under family reunification programs and were also more likely to be raising children at home. They cite the increasing employment rate for foreign female workers over the five-year study period as evidence of this.

Falling number of arrivals from EU

This latest study comes in the wake of a similarly positive report published by Seco in July which found the arrival of EU and EFTA workers had not pushed up down Swiss wages.

Switzerland experienced real wage growth of 0.7 percent a year from 2002 to 2017, the agency said in that report. Nominal wage growth had been lower from 2009 to 2017 than in the years before the economic crisis but this had been offset by negative inflation.

The Seco report also net migration to Switzerland from EU and EFTA countries in 2017 was 31,250, down 11 percent on 2016 and 54 percent lower than the record number seen in 2013.

In addition, the report highlighted the fact around 50 percent of workers who arrived in 2009 had left by 2014.

But the July report did also note that the unemployment rate among EU and EFTA workers in Switzerland was a relatively high 5.5 percent in 2017 against the overall Swiss rate of 3.3 percent last year.

Both reports come as Switzerland tries to draw up a new framework agreement with the EU on relations between the Alpine country and the bloc. Switzerland’s wage protection measures, designed to ensure foreign workers do not push down high Swiss salaries, remain a stumbling block in the protracted negotiations.

Switzerland needs foreign workers to cover skills shortages but there are continued fears that Swiss wages are under threat as a result.

Read also: The pros and cons of working in Switzerland


How Europe’s population is changing and what the EU is doing about it

The populations of countries across Europe are changing, with some increasing whilst others are falling. Populations are also ageing meaning the EU is having to react to changing demographics.

How Europe's population is changing and what the EU is doing about it

After decades of growth, the population of the European Union decreased over the past two years mostly due to the hundreds of thousands of deaths caused by the Covid-19 pandemic.

The latest data from the EU statistical office Eurostat show that the EU population was 446.8 million on 1 January 2022, 172,000 fewer than the previous year. On 1 January 2020, the EU had a population of 447.3 million.

This trend is because, in 2020 and 2021 the two years marked by the crippling pandemic, there have been more deaths than births and the negative natural change has been more significant than the positive net migration.

But there are major differences across countries. For example, in numerical terms, Italy is the country where the population has decreased the most, while France has recorded the largest increase.

What is happening and how is the EU reacting?

In which countries is the population growing?

In 2021, there were almost 4.1 million births and 5.3 million deaths in the EU, so the natural change was negative by 1.2 million (more broadly, there were 113,000 more deaths in 2021 than in 2020 and 531,000 more deaths in 2020 than in 2019, while the number of births remained almost the same).

Net migration, the number of people arriving in the EU minus those leaving, was 1.1 million, not enough to compensate.

A population growth, however, was recorded in 17 countries. Nine (Belgium, Denmark, Ireland, France, Cyprus, Luxembourg, Malta, Netherlands and Sweden) had both a natural increase and positive net migration.

READ ALSO: IN NUMBERS: Five things to know about Germany’s foreign population

In eight EU countries (the Czech Republic, Germany, Estonia, Spain, Lithuania, Austria, Portugal and Finland), the population increased because of positive net migration, while the natural change was negative.

The largest increase in absolute terms was in France (+185,900). The highest natural increase was in Ireland (5.0 per 1,000 persons), while the biggest growth rate relative to the existing population was recorded in Luxembourg, Ireland, Cyprus and Malta (all above 8.0 per 1,000 persons).

In total, 22 EU Member States had positive net migration, with Luxembourg (13.2 per 1 000 persons), Lithuania (12.4) and Portugal (9.6) topping the list.

Births and deaths in the EU from 1961 to 2021 (Eurostat)

Where is the population declining?

On the other hand, 18 EU countries had negative rates of natural change, with deaths outnumbering births in 2021.

Ten of these recorded a population decline. In Bulgaria, Italy, Hungary, Poland, and Slovenia population declined due to a negative natural change, while net migration was slightly positive.

In Croatia, Greece, Latvia, Romania and Slovakia, the decrease was both by negative natural change and negative net migration.

READ ALSO: Italian class sizes set to shrink as population falls further

The largest fall in population was reported in Italy, which lost over a quarter of a million (-253,100).

The most significant negative natural change was in Bulgaria (-13.1 per 1,000 persons), Latvia (-9.1), Lithuania (-8.7) and Romania (-8.2). On a proportional basis, Croatia and Bulgaria recorded the biggest population decline (-33.1 per 1,000 persons).

How is the EU responding to demographic change?

From 354.5 million in 1960, the EU population grew to 446.8 million on 1 January 2022, an increase of 92.3 million. If the growth was about 3 million persons per year in the 1960s, it slowed to about 0.7 million per year on average between 2005 and 2022, according to Eurostat.

The natural change was positive until 2011 and turned negative in 2012 when net migration became the key factor for population growth. However, in 2020 and 2021, this no longer compensated for natural change and led to a decline.

READ ALSO: IN NUMBERS: One in four Austrian residents now of foreign origin

Over time, says Eurostat, the negative natural change is expected to continue given the ageing of the population if the fertility rate (total number of children born to each woman) remains low.

This poses questions for the future of the labour market and social security services, such as pensions and healthcare.

The European Commission estimates that by 2070, 30.3 per cent of the EU population will be 65 or over compared to 20.3 per cent in 2019, and 13.2 per cent is projected to be 80 or older compared to 5.8 per cent in 2019.

The number of people needing long-term care is expected to increase from 19.5 million in 2016 to 23.6 million in 2030 and 30.5 million in 2050.

READ ALSO: How foreigners are changing Switzerland

However, demographic change impacts different countries and often regions within the same country differently.

When she took on the Presidency of the European Commission, Ursula von der Leyen appointed Dubravka Šuica, a Croatian politician, as Commissioner for Democracy and Demography to deal with these changes.

Among measures in the discussion, in January 2021, the Commission launched a debate on Europe’s ageing society, suggesting steps for higher labour market participation, including more equality between women and men and longer working lives.

In April, the Commission proposed measures to make Europe more attractive for foreign workers, including simplifying rules for non-EU nationals who live on a long-term basis in the EU. These will have to be approved by the European Parliament and the EU Council.

In the fourth quarter of this year, the Commission also plans to present a communication on dealing with ‘brain drain’ and mitigate the challenges associated with population decline in regions with low birth rates and high net emigration.

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.