A new study from the State Secretariat for Economic Affairs (SECO) has found that despite not being part of the bloc, the free movement of people policy between Switzerland and the EU has been a success story. 20 years after the agreement was signed, the government argued that EU immigration has boosted the economy and made it easier for the country to pay for its social security programmes.

Immigration has supported Swiss social security

In the report, created and approved by the federal government and SECO, experts said that “EU immigration has been important to meet the demand for labour over the past 20 years.” They argued that EU immigration has been able to curb demographic ageing, expand the labour market and provide a stream of workers to help fund and maintain Swiss pensions and other programmes.

What’s more, the study found that while EU citizens with Swiss residence permits are more likely to become unemployed and claim unemployment benefits, they are not more likely to claim social security than Swiss citizens in the long term. In fact, since most new arrivals to Switzerland are of working age, higher immigration has slowed demographic ageing more than in other European nations, making the country less susceptible to declining income through taxes.

Skills shortage in Switzerland likely solved by immigration

The higher rate of new arrivals - the Swiss population has grown by 0,9 percent every year since 2002, largely thanks to immigration - is also having a positive impact on the skills shortage. Indeed, the study noted that expats and internationals help fill jobs in Switzerland that have lower or medium educational requirements, alongside more highly skilled roles.

Trouble may be on the way, though, with SECO warning that "further growth in the working-age population will in future depend even more heavily than before on immigration. The number of 65-year-olds already exceeds that of 20-year-olds; there is a tendency for more people to retire from the labour market than young workers to enter it.”

Switzerland must remain attractive to new expats

However, they argued that so long as the country maintains its attractiveness as a place to live and work through good quality of life, high salaries and flexible working hours, Switzerland will be able to put off making demographic-caused cost-saving measures, like reducing benefits and raising the retirement age, for longer than its European neighbours.

For more information, check out the official study (in German).

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