EU expats vital in maintaining the Swiss economy, new report finds

A new study commissioned by the Swiss government has found that expats from the European Union play a vital role in the country’s economy and labour market. Despite growing calls to restrict migration, the report argued that new arrivals are invaluable amid worker shortages and demographic change.

Expats from the EU are essential for Switzerland

In the study, the Federal Council argued that the free movement of people agreement with the European Union, which allows EU and EFTA citizens to more easily move to and claim a residence permit in Switzerland, has an “important” role in the present and future of the Swiss economy. They added that migration is “closely linked [to Switzerland’s] economic needs.”

New arrivals were said to “meet the rapidly growing demand for highly qualified workers.” In addition, “Swiss companies also rely on workers from the EU/EFTA area when recruiting for lower-level jobs, such as in the hospitality industry, construction, and industry.”

SVP claims about EU migration unfounded, report finds

Though the referendum is not mentioned explicitly, the report is seen as a rebuttal to the No 10 Million Switzerland! Initiative from the Swiss People’s Party, which would likely scrap the free movement of people deal with the EU if the population rises above 9,5 million people before 2050. Specifically, the report counters two of the SVP’s talking points: that expats take jobs away from Swiss citizens and that they are a burden on unemployment insurance and other social benefits.

For the former, the Federal Council found that in many sectors, jobs in Switzerland “can often no longer be filled by domestic workers.” “The high level of immigration into the labour market in recent years has been accompanied by persistently low unemployment and an increase in labour force participation for the domestic workforce. This suggests that immigration complements rather than displaces the domestic labour force.” 

Migration will be vital in maintaining Swiss social security

For the latter, they found that while more unemployment insurance is paid to expats than locals, migrants pay more into other programmes, such as first pillar pensions, than they actually receive in benefits. The high rates of unemployment payments are primarily due to the fact that expats tend to be employed in more temporary and less secure positions.

In fact, looming demographic changes in Switzerland are set to make expats even more vital in maintaining social benefits as they are. According to the latest forecasts, even if the country blows past the SVP’s 10 million limit in 2033 and sports a population of over 11,6 million people in 2055, the number of employees paying for each retiree through taxes will go from 2,6 in 2024 to just two in 2055.