Forced Migrants” in Post-War Germany: New evidence of long term economic disadvantage

The displacement of millions of ethnic Germans from Eastern Europe to West Germany during and after World War II had significant and mostly negative long-run economic consequences for the displaced. Even a quarter of a century after the war ended, these ”forced migrants” were still economically disadvantaged relative to native West Germans.

That is the central finding of research by Thomas Bauer, Sebastian Braun and Michael Kvasnicka, published in the September 2013 issue of the Economic Journal. Their study finds that the displaced typically made the transition from traditional sectors of the economy, such as agriculture, into modern sectors more quickly. But while this greater mobility might be expected to have fostered successful integration, in fact it was insufficient to achieve long-run economic parity between migrants and natives.

The final stages of World War II and the immediate post-war period saw the exodus of at least 12 million Germans from Eastern Europe. Most fled or were transferred to West Germany in one of the largest forced population movements in history. The enormous inflow of these forced migrants prompted a drastic increase in the West German population – from 39 million in 1939 to 48 million in 1950. By far the largest number came from Germany”s former eastern territories that had been lost after World War II.

The integration of these displaced people into the war-ravaged West German economy is largely thought to have been both swift and successful. But this new study shows that in 1971 – a quarter of a century after displacement – the economic experiences of forced migrants and native West Germans who were comparable before the war were strikingly different.

For example, first-generation displaced men had 5.1% lower incomes than native men. Displaced women had 3.8% lower incomes than native women. And all displaced people faced a higher unemployment risk than their native peers.

But displacement was far from uniform in its effects across migrants of different background. Most notably, the study finds a large positive income differential of more than 10% for male and female agricultural workers who had been displaced in the wake of World War II. This differential – and income differences more generally – can be explained by the massive changes in the occupational and sectoral employment structure of forced migrants that were induced by the displacement.

Displacement dramatically accelerated transitions out of low-paid agriculture: in 1971, displaced men and women had, respectively, a 68% and 78% lower probability of working in agriculture than native men and women. Displacement also increased blue-collar employment; and it reduced self-employment among migrants.

Overall, the results suggest that displacement had mostly negative long-run economic consequences for the displaced. Language deficiencies or a potentially negative self-selection of low-productivity migrants cannot explain these findings. Neither can adverse macroeconomic conditions in the destination region: in fact, for most of the 1950s and 1960s, aggregate economic conditions in West Germany were favourable.

”The Economic Integration of Forced Migrants: Evidence for Post-war Germany” by Thomas Bauer, Sebastian Braun and Michael Kvasnicka is published in the September 2013 issue of the Economic Journal. Sebastian Braun is at the Kiel Institute for the World Economy. Thomas Bauer is at the University of Bochum. Michael Kvasnicka is at the Otto-von-Guericke-University Magdeburg.

Thomas Bauer

University of Bochum | thomas.bauer@rub.de

Sebastian Braun

+49 431 8814 482 | sebastian.braun@ifw-kiel.de

Michael Kvasnicka