Does Europe Need Immigration for Demographic Reasons?

Guillaume Marois , International Institute for Applied Systems Analysis
Alain Bélanger, Institut National de la Recherche Scientifique (INRS)
Wolfgang Lutz, Wittgenstein Centre

This paper provides a systematic multidimensional demographic analysis of the degree to which the economic consequences of population aging can be mitigated by changes in migration and labor force participation patterns. Using a multidimensional microsimulation population projection model accounting for 13 individual characteristics including education and immigration-related variables, we built scenarios of future changes in labor force participation, migration volumes and their educational composition and speed of integration for 28 member states of the EU. We study the consequences in terms of the conventional age dependency ratio, the labor force dependency ratio, and, using education as a proxy of productivity, the productivity-weighted labor force dependency ratio, which accounts for the fact that not all individuals are equality productive in the society. The results show that in terms of the latter ratios, population aging looks less daunting than when only considering age structure. In terms of policies, higher labor force participation as already observed in Sweden and education selective migration tied with high integration could even improve economic dependency. On the other hand, high immigration volumes combined with low education and integration leads to increasing economic dependency. This shows the high stakes involved with integration outcomes under high migration volumes.

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 Presented in Session 43. Perspectives of Immigration and Their Integration