Luxembourg is drawing in foreign talent but losing much of it quickly. Around 30% of new entrants leave Luxembourg within a year of arriving and 50% leave within five years, according to a report by the Luxembourg Institute of Socio-Economic Research for the Ministry of the Economy. Only three out of ten foreign-born workers who arrived in 2002 still had a link with the Luxembourg social security system in 2025, the report found, while immigrants showed more stable job trajectories than non-residents.

That churn is becoming a more pressing issue for a labour market that depends overwhelmingly on workers from abroad. Liser found that 26,342 foreign-born people aged 20 and over entered the Luxembourg labour market in 2024, up from 16,981 in 2002. Foreign-born workers accounted for 90.5% of all new entrants in 2024, against 89.5% in 2002, underlining how central immigration and cross-border commuting have become to the country’s labour supply. The study, on 24 March 2026, also pointed to a recent slowdown in arrivals, with entries down from 33,806 in 2022 and 29,402 in 2023.

France main source of cross-border labour

Cross-border workers from France remained the largest single group among new foreign-born entrants in 2024. They represented 37.8% of the total, ahead of immigrants resident in Luxembourg at 31.2%, cross-border workers from Germany at 10.3% and those from Belgium at 9.7%. A further 11.0% lived outside neighbouring countries or had an unknown country of residence. In volume terms, immigrants increased to 8,224 in 2024 from 3,979 in 2002, while cross-border entrants rose to 15,233 from 12,226.

Among cross-border workers, France has become more dominant over time. Liser found that the share of new cross-border entrants living in France rose to 65.3% in 2024 from 53.5% in 2002, while the Belgian and German shares declined. The report also noted a broader diversification in origins, with the share of non-European nationals among new entrants rising significantly since 2002 to 38.3% in 2024.

Inflows of more skilled

The composition of new arrivals is also changing. Among immigrants, Liser found that entries are increasingly concentrated in skill-intensive sectors, with specialised, scientific and technical activities together with financial and insurance activities accounting for 40% of new entrants in 2024. Non-residents remained more concentrated in lower-skilled sectors such as construction and transport and storage, although the report noted that skill-intensive sectors were gaining ground there too.

The study further concluded that most entrants begin on permanent contracts, especially immigrants, while non-residents are more exposed to temporary and agency work. That distinction matters because the report linked retention outcomes to both sector and the nature of the first contract. Health, social work and public administration and education, together with self-employment, apprenticeships and permanent contracts, were associated with the strongest retention rates. Construction, administrative support services and primary and secondary sectors were linked to quicker exits, with about one third of entrants leaving within 12 months.

Early losses

The report found that departures usually happen after a relatively short stay. The proportion of entrants leaving within a year was relatively stable at around 28%, although it was somewhat higher for recent cohorts, reaching 34% for those entering in 2023 and 27.5% for those entering in 2024, compared with 25% for the 2013 cohort. For the 2013 cohort, 14% left between one and three years after entry, 7% between three and five years, 10% between five and 10 years and 4% after more than 10 years, Liser found.

The difference between immigrants and non-residents is marked. Among workers who entered in 2024, 86.2% of immigrants were still in employment in 2025, compared with 65.1% of non-residents. For the 2002 cohort, the equivalent shares were 28.8% for immigrants and 24.0% for non-residents. The share of immigrants leaving within 12 months fell to 11.3% for the 2024 cohort from 24.0% for the 2002 cohort. Among non-residents, by contrast, it rose to 34.8% from 29.5%, suggesting Luxembourg is much better at retaining workers who settle in the country than those who continue to live abroad.

Residential mobility

The report also identified an asymmetry in residential mobility that could further complicate Luxembourg’s labour model. Depending on year of entry, the share of immigrants who were living outside Luxembourg by the last month they were observed ranged from 6.4% for the 2024 cohort to 29.4% for the 2015 cohort. Among entrants who were initially non-resident, only 3.1% to 7.7% were living in Luxembourg at the last observed date. Proportionally, more immigrants later moved out than non-residents moved in.

The study’s broader conclusion is that Luxembourg’s challenge is no longer simply one of attraction. The country continues to pull in large numbers of foreign-born workers and remains heavily dependent on them for labour market growth. But unless more of those arrivals can be converted into longer and more stable careers, the economy will remain reliant on a model that constantly needs fresh inflows from abroad to replace those it loses.