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Friday, November 14, 2003

Migration is the Theme du Jour

Following on from Marcelo's posts yesterday, there was a post yesterday by Annemarieke Christian & Elga Bartsch in the Morgan Stanley GEF, about the positive benefits on in-migration for an ageing society. When I first started raising this topic 18 months ago (when I set up Bonobo) I felt literally a voice in the wilderness, a madman (an alternative name for the page could have been Diogenes Lantern). Such is the process of diffusion and propagation of ideas in society (although clearly I am not saying that all this comes from me, the UN population division must take the principal credit, and in particular Herve Le Bras), we now find that this idea is much les radical than it once was. Still, the misunderstandings abound. The 'favoured solution' is 'East-West' migration, while the more interesting 'South-North' is barely considered. Yet it is obvious that the Eastern Europe has an even worse ageing panorama than Western Europe. I don't know where the 18.8% figure for the dependency ratio in these societies comes from, but it worth bearing in mind that living espectancy is drastically shorter for these societies, so this may equally reflect an absence of older people and young people of school age. OTOH you have to remember that many in the 25-40 age group may be already out working abroad (this is certainly the case with Bulgaria, where the recent elections only achieved a 34% turnout based on the full electoral census. This must give some measure of how many people are actually 'out') - so really it would be much better to talk about this country by country and in detail.

Given the principle of free movement of citizens across the EU, the geographical proximity and the large income differentials between the current EU members and the Central and Eastern European countries (CEEC), the accession of those countries to the EU will likely lead to substantial migration of labour from East to West. Estimates on the likely influx of migrants vary widely, ranging from 40K to 680K per year[1]. But at 0.4% of the EU-15 labour force per annum, even the largest estimate is unlikely to be enough to offset the demographic trend of a shrinking labour force that is likely to set in in Western Europe from 2010 onwards. Thus, East-West migration is unlikely to compensate for the dramatic ageing of the EU-15 labour force over the next 50 years. In addition, fear of a large influx of immigrants has caused the EU to incorporate so-called transition agreements into the accession treaties, which give the EU member states the option to postpone the implementation of the free movement of labour by up to seven years. According to our estimates, other, bolder measures will be needed to fend off a looming decline in trend growth, which could see trend GDP growth dropping from 2.0% at present to less than 1% by 2040. Our simulations show that Europeans will have to work more years, longer hours, or in greater numbers to prevent a notable decline in the trend GDP growth in the first half of this century.
Source: Morgan Stanley GEF

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