Executive Summary

The 22nd Report of the Observatory on the Freedom of Movement Agreement documents the central role of EU/EFTA labor force immigration for the Swiss labor market between 2010 and 2025. Particularly in knowledge-intensive services, seasonal industries, hospitality, construction, and the chemical/pharmaceutical industry, immigration is indispensable for meeting labor force demands. EU/EFTA immigrants show higher employment rates (87.3%) than Swiss citizens (84.8%) and work on average in higher employment degrees. Immigration compensated for the decline in the Swiss working-age population and contributed to economic growth as well as stabilization of the AHV (old-age insurance).

Persons

Topics

  • EU-Switzerland Freedom of Movement Agreement
  • Labor market integration
  • Demographic change
  • Social insurance (AHV, IV, ALV)
  • Sectoral labor force demand

Clarus Lead

The Swiss economy faces a structural challenge: the domestic working-age population is shrinking while the labor market is expanding. The report shows that EU/EFTA immigration not only fills this gap but also stabilizes the financing base of social security systems – a finding that is central to the political debate on immigration limits. Particularly relevant: immigrants contribute disproportionately to pension and disability insurance while making less use of these benefits later.

Detailed Summary

Sectoral Concentration and Labor Market Gaps

Immigration follows no random pattern but concentrates in areas with structural bottlenecks. In the health and social services sector, the number of EU/EFTA workers increased by 90,000 persons between 2010 and 2025 – a rise that occurred parallel to 162,000 new Swiss jobs. In hospitality, EU/EFTA nationals make up 42 percent of the workforce; in construction, 34 percent. The chemical and pharmaceutical industry is particularly dependent: 50 percent of workers come from the EU/EFTA area, in the watch industry 42 percent. This quota suggests that domestic workers do not fill these positions in sufficient numbers.

Labor Force Participation and Labor Market Complementarity

Immigrants work more intensively than Swiss citizens: their employment rate was 87.3 percent in 2025 (men: 90.1%, women: 83.6%) compared to 84.8 percent for Swiss citizens. The average employment degree of EU/EFTA immigrants was 89 percent, while Swiss citizens worked on average 81 percent. Contrary to concerns about displacement effects, the labor force participation of Swiss citizens increased over the past 15 years, and the structural unemployment rate remained stable. This suggests complementarity rather than substitution.

Economic Growth and Social Systems

Total economic labor volume (measured in working hours) grew between 2010 and 2025 at an average of 0.8 percent per year – exclusively through immigration, as the domestic working-age population declined. Real GDP growth was 1.8 percent per year; with population growth of 1.0 percent per year, this resulted in per capita growth of 0.8 percent. For the AHV, immigration is fiscally advantageous: EU/EFTA nationals contribute 28 percent of wage contributions to AHV and IV but receive only 15 percent of pensions. Their share of supplementary benefits is only 11 percent, as many emigrate before retirement. In unemployment insurance, a different pattern emerges: immigrants have an increased unemployment risk and receive more benefits than they contribute. The social welfare rate of EU/EFTA nationals was 2.3 percent in 2024 compared to 1.8 percent for Swiss citizens.

Key Findings

  • EU/EFTA immigration was necessary between 2010 and 2025 to meet labor force demands in knowledge-intensive services, seasonal industries, and manufacturing.
  • Immigrants show higher employment rates and longer working hours than Swiss citizens; domestic labor force participation increased in parallel (no displacement).
  • Immigration compensated for the decline in the Swiss working-age population and enabled real GDP growth of 1.8 percent per year.
  • EU/EFTA nationals contribute disproportionately to AHV/IV and receive fewer pensions, but stabilize the financing base of the pension system.

Critical Questions

  1. Data Quality (Evidence): The report uses aggregated statistics through 2025. How is employment recorded (self-declaration, social insurance data)? Are gray market employment or undocumented work included in these figures?

  2. Conflicts of Interest (Incentives): The report comes from the Federal Council and Observatory – both have an interest in legitimizing the Freedom of Movement Agreement. Are there independent counter-studies that reach different conclusions?

  3. Causality (Alternatives): The report shows correlation between immigration and GDP growth. Is this growth caused by immigration, or could domestic productivity increases have achieved similar effects?

  4. Unemployment (Counter-hypotheses): The report claims structural unemployment remained stable. Were effects on wages and working conditions in low-wage sectors investigated, even if the rate remained stable?

  5. Social Insurance (Feasibility): The AHV benefits from immigration, but unemployment insurance bears disproportionate burdens. How sustainable is this asymmetry during economic downturns?

  6. Sectoral Dependency (Risks): 50 percent of chemical industry workers come from EU/EFTA. What risks arise for these sectors if the Freedom of Movement Agreement is restricted?

  7. Gender Effects (Side Effects): Women from EU/EFTA show higher employment rates (83.6%) than Swiss women (82.5%). Are these women overrepresented in precarious positions (seasonal work, care)?

Sources

Primary Source: [22nd Report of the Observatory on the Freedom of Movement Agreement] – https://www.news.admin.ch/de/newnsb/OHqZDeeGGXr9tAH-z1OLX (Bern, 25.06.2026)

Verification Status: ✓ 25.06.2026

This text was created with the support of an AI model. Editorial Responsibility: clarus.news | Fact-Check: 25.06.2026