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Immigrants wanted: The future role of immigration to U.S. and Europe

Spain's version of a green card, January 2009
Spain's version of a green card, January 2009
Photo by Andres Rueda/Flickr (Creative Commons)

Since early this year, the Washington, D.C.-based Migration Policy Institute has partnered with the European University Institute in Italy to produce a series of reports and policy briefs on the immigration challenges facing U.S. and European governments. They have explored demographic changes, the economics of immigration and integration, among other things.

A final report just released looks at the shared challenges on both sides of the Atlantic in the future and potential reforms - and at the role that immigration will play as the native-born population ages and leave the workforce.

In Europe, these changes could potentially threaten the region's future economy and global influence, the report concludes, making inbound migration a necessity. From the report:

While the population of Europe will decrease or stabilize, depending upon migration scenarios, most other regions will continue to grow. As a result, the relative weight of Europe in world population terms will dwindle, thereby potentially undermining Europe’s influence in world affairs and the institutions of global governance.

Without migration, Europe would already be experiencing a decline in the size of its labor force. The reduction in the native labor force has already begun and will accelerate in coming years, in stark contrast to many emerging economies that are going through demographic expansion.

Under a no-migration scenario, the working-age population of the European Union would fall by a projected 84 million, or 27 percent of its current size, between 2010 and 2050. Even with migration maintained at the relatively high precrisis levels — a highly unlikely scenario when considering the euphoric economic conditions that drew immigrants to the European Union during the mid-2000s boom and the dramatic collapse that succeeded it — this loss would reach 35 million over the same period, and reductions of 5 to 11 million each would be expected in Germany, Italy, and Poland.

The situation in the United States is less dire, though the projected growth in the labor force over the next 20 years is "expected to be entirely attributable to immigration," the report reads:
By contrast, US projections present a more favorable picture. The Congressional Budget Office projects that the labor force will continue to grow in coming decades. Projected growth under moderate assumptions about immigration flows is 0.7 percent annually in the coming decade, followed by 0.5 percent from 2020 to 2030.

This growth nonetheless represents a break from the past, in which the US labor force experienced rapid growth fueled by massive increases in female labor force participation and by the entry of the baby boomer cohorts onto the labor market. Relatively high net immigration has sustained this growth to a significant extent, and by 2030 labor force growth in the United States is expected to be entirely attributable to immigration.

But while immigrants can help soften the economic blow as native-born populations age, newcomers must be able to find "productive employment," at their destination, the report continues: "Investment in long-term or permanent immigrants and their families, therefore, is a crucial part of any strategy to meet the challenge of demographic change through immigration."

The entire report can be downloaded here.