Replacement therapy

Migration can offer part of the solution to Europe’s ageing population, writes Claude Moraes, but social integration and sustaining high inflows of people are problems that remain to be solved

In 2000 the UN produced painstaking research showing how rapidly the populations of virtually all EU countries and Japan would age resulting from the lowest fertility and mortality rates in the world. They speculated that it was inevitable that the EU would, through simple market arithmetic, have to replace workers with migrants from outside the EU at an increasing rate, with all the political, economic and social impact that new immigration brings.

The predictions for the EU then were stark. Some EU countries, including Italy, Bulgaria and Estonia, will see a reduction in their populations by between one quarter and one third by 2050. Population ageing will bring the median age of the EU as a whole to an unprecedented high level. In Italy for example, the median age will rise from 41 in 2000 to 53 in 2050. The UN described as “striking” and “critical” the situation in “low-fertility Europe”, which included the UK, Germany and France in its groundbreaking study.

This situation is not, however, just a European trend – the US will actually increase its settled population by almost a quarter by 2050. The population of the EU, which in 1995 was larger than that of the US by 105 million, will in 2050, be smaller by 18 million. If these and similar exhaustive surveys show that ‘replacement migration’ is a major solution for the EU to its ageing working-age population, then why does it remain such a controversial issue?

First, beneath the figures for the EU as a whole are important variants – for example, since the UN study, France and the UK have been seen to be able to maintain their population levels with less immigration while Italy still needs higher migrant numbers. Free movement of workers from the new accession states to countries like the UK and Germany has also provided young EU migrant labour to EU states with relatively older populations, rather than the need for non-EU workers. Nevertheless, in 2008, it is clear that the trends predicted by the UN have, on the whole, been borne out. Of the actions being taken by member states to deal with this demographic shift, including the changes in retirement age and pension provision, the management of replacement migration has remained one of the most sensitive areas of policy. Migration, particularly from outside the EU, remains a historically and politically charged phenomenon. Established immigration patterns from former colonies, family reunification and the whole area of trafficking and illegal migration has been near the top of the political agenda for most of the post-war era in western Europe. The complex nature of immigration policies in EU states, the difficulties in adopting managed migration policies and the many issues of integration of immigrants have dominated the debate.

Population ageing can, according to the OECD, explain why many existing vacancies are filled by immigrants in Spain, Germany and Italy. They have consistently said that increasing labour participation of migrants is an option which cannot be ignored in relation to ageing populations.
They give the example of Spain which, when it regularised large numbers of immigrants in 2005, saw the evidence of immigrants directly filling vacancies left dormant by the effects of ageing. They said that not only do such workers fill shortages, but they also contribute taxes which ultimately fund the growing healthcare and pensions bills of ageing citizens across the EU. Beneath the figures in the UK and Spain is also the phenomenon of migrant workers massively involved in older people’s health and care – jobs which are often low paid and difficult to fill. The OECD reported recently that migration had even boosted female labour force participation, with a number of migrants now providing childcare assistance in countries like Spain.

There is, however, a strong word of caution when talking about replacement migration. In order to compensate for population ageing, inflows of migrants have to be high over a long period of time. The financial contribution of immigration, I believe, is significant. In the UK, the CBI estimates a £6bn net annual contribution – yet such figures have been recently disputed by a House of Lords committee, and there is a heated debate in the EU about how big the net contribution of migration actually is. Social integration is the other huge elephant in the room. Sustained high levels of replacement migration simply cannot take place without the best integration policies. Here, the EU can play a vital role in encouraging best practice, which is often a regional and local issue. Yet all of the major objective studies, including those of the UN and OECD, show that partly due to ageing, entire segments of the economies of EU member states could not function without new migration – this includes countries like Ireland and Portugal, which in recent years have provided net migration to other countries.

Migration can only be one major solution to the ageing of the EU’s population, and there is clear evidence in my view of the major positive impact of such migration. Without better management of such migration and communication by member states of why such migration is important, this solution will continue to be politically controversial.