Overview

• At the Fed’s Jackson Hole symposium, the ECB president said foreign‑born workers accounted for about half of EU employment growth over the past three years despite being 9% of the workforce in 2022.
• She said the extra labor supply let firms meet post‑pandemic demand, helping cool inflation without the typical rise in unemployment after sharp rate increases.
• Lagarde estimated Germany’s output would be about 6% smaller without these workers.
• Greater participation by older workers also helped, with euro‑area unemployment estimated at 6.6% rather than 6.3% absent those additions.
• Bank of Japan Governor Kazuo Ueda described a similar dynamic in Japan, where immigrants are roughly 3% of the workforce yet made up about half of recent labor‑force growth, even as immigration faces growing political resistance.