The Employment Effects of Immigration: Evidence from the Mass Arrival of German Expellees in Postwar Germany


The authors of this piece have produced a tightly reasoned and carefully researched investigation into the employment effects of a unique moment in economic history: The forced expulsion of eastern Germans during the last days of the Second World War and afterwards, to the English, American and French zones of occupation. In fact, most of the study focuses on the English and American portions, as the French initially prohibited resettlement in areas under their control. As the authors note, this period is valuable for economic inquiry precisely because of the tragic nature of the relocation. Those being deported were not able to make a selection, but were uniformly “dumped” into the areas under investigation. The question then was, how would this addition of such a large number, very often exceeding 10 percent of the native population, effect the local economies, rural and urban? The period runs roughly through the 1950s, so it is a relatively short run, offering a tightly defined  period of study, covering the whole range of occupations and skill levels with nearly perfect substitution due to common language. The finding was that in the highest percentage areas, the economic effect was seen not in wage declines, but in increasing unemployment among original inhabitants. The authors note that industrial recovery of the German economy came quickly, beginning in 1948, but also say that currency reform perpetuated the unemployment problem, eventually resulting in increased tensions between western and eastern Germans in the first years of the decade. There really is no consideration of what eventually alleviated these stresses, though the implication is that industrial growth ultimately took care of the problem. A bit more on this would have been helpful, especially as it relates to the “Wirschaftswunder.” There is also little in the way of discussion of the health or general condition of the work force beyond occupations and skills, and as we know, this must have had some impact given the very large number of deaths due to forced relocation.