The EU expansion means an even bigger market for capital and labour. Well, eventually. One of the great dreams of EU expansion since the outset has been the prospect of a completely unified labour market. Yet it has always been one of the hardest to construct: Greeted with transition periods, in a bid to stem a would-be inflow of new migrants from eastern Europe.. Are they right to be so prudent? Not entirely. For a start, most immigration into Europe come from countries outside the EU, from Asia and North Africa for instance. Another reason for not expecting a sudden inflow is that, even among these immigrants, different countries have different kinds of immigration. The Portugese and Algerians are common in France, Turks in Germany and Pakistanis in Britain. Some trends change over time, with Dominicans being a recent strong source of immigration to the east coast of the US for instance. Ireland is now a country of immigration, but while many talk of east Europeans, many of these come from non-accession countries like Romania. And even further afield, Philipinos: In 1996 there were 18000 non-EU foreigners in Ireland; by 2002 there were 70,000.Again, the data point to quite a different reality.
Such figures put paid to notions of Fortress Europe. As our chart shows, the number of foreign-born immigrants has risen far more sharply in Europe over the last decade than in the US. Take the stock of foreigners. Chinese add up Germany; France, UK and rest of Europe, higher than US?
So much for the trends, what of the public policy implications? There are many affect social costs, from education to healthcare. But one of the most hotly debated questions is whether immigration policies, which increasingly target skilled personnel in technology and medicine for instance, can in the end help OECD countries pay for their future pension costs, on the crude assumption that more recruits would generate more social security contributions, and so on. However, the argument then runs aground on for several reasons: The most basic one being that immigrants are frequently not temporary and themselves wish to retire. And their population ages too. Furthermore, not all legal immigrants join the workforce. In the US and Canada only quarter of immigrants are workers, the rest being family dependents. All this assumes the immigrant will find work, yet the unemployment rate among foreigners is typically twice that of the national average. Moreover, new work permit holders are often paid below national average, even though most OECD countries concentrate their re
Immigrant workforce is diverse by age, origin and intention. Indeed, some OECD countries have begun focusing more on training and integrating new arrivals in part to hold on to them in case they wish to move on to competitor countries. But while such policies can help integrate populations and meet labour requirements, they might not be enough to fill any pensions funding gap.
OECD (2003), Trends in International Migration, Parisblog comments powered by Disqus