Wednesday, March 08, 2006

Immigration Matters Too

by Edward Hugh

There is quite a lot of info on immigration in the news today. First off the starting block is the fact that the number of illegal immigrants inside the US has continued to grow by nearly half a million a year over the last 5 years according to a survey released yesterday by the Pew Hispanic Centre. This is quite a large number, but to put it (or the Spanish construction boom if you prefer) into perspective, irregular migration into Spain has been running at over 600,000 a year over the same period. So for a country the size of the United States this should make you raise an eyebrow, but it shouldn't cause you to fall off your seat (the Spanish case though perhaps should).

To put this (and perhaps the US housing boom) in even greater perspective this earlier report points out that :

"The number of migrants coming to the United States each year, legally and illegally, grew very rapidly starting in the mid-1990s, hit a peak at the end of the decade, and then declined substantially after 2001. By 2004, the annual inflow of foreign-born persons was down 24% from its all-time high in 2000"

Meantime the UK is struggling hard to regularise its migratory flows and the Home Office has announced the creation of an immigration points system that would give preference to young highly skilled professionals and entrepreneurs and make it more difficult for low skilled workers to fill jobs. Lower skilled 'third tier' workers - such as agricultural workers, hotel and catering staff - the demand for whom seems to be in reality what fuels the flows, would only be allowed in if “specific temporary labour shortages” can be identified by a newly proposed independent Skills Advisory Body.

Of course, generally there are mixed opinions about the economic plusses and minuses of migration. Some level of immigration is almost certainly necessary, especially in those cases where we are successful in ensuring that our own young people move up the value chain in terms of the kinds of occupations they can realistically aspire to. Also those countries with very low fertility most definitely are in need of some systematic immigration.

However we are now a long way on in the debate from the early UN proposal for replacement migration as a catch all solution to long term structural demographic changes. As I noted in this post, David Coleman has not been backward in coming forward to point out some of the problems large scale migration poses, while Nigel Harris seems to occupy the opposing corner.

Wolfgang Lutz has another attempt to address the issue in a paper with Sergei Scherbov - Can Immigration Compensate for Europe’s Low Fertility, and Kotlikoff, Fehr and Jokisch add their two cents worth in The Developed World’s Demographic Transition – The Roles of Capital Flows, Immigration, and Policy.

At the end of the day, as well as facilitating some immigration I cannot help but feel we need to give some more serious and urgent consideration to the question of raising participation rates in the higher age groups, and at the same time to systematically revising upwards our anticipated retirement ages.

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