Tuesday, August 01, 2006


Migration and Economic Growth in the US

One of our themes here at Demography Matters is the idea that inward migrant flows can help ease the pressure put on health and pension systems which results from excessively rapid population change. As I argue here, in the case of Ireland, this is a win-win situation, where a comparatively young population generates a level of economic growth which attracts an inflow of migrants which helps maintain the population as a comparatively young one. At the other end a rather older society like Italy attracts migrants at a somewhat slower pace and is unable to generate enough economic activity and growth to hold on to its own young educated people.
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Migration and Germany

The German Federal Statistics Office has released the migration flow data for 2006:

As reported by the Federal Statistical Office on the basis of provisional results, 662,000 persons in-migrated to Germany in 2006 and 639,000 persons out-migrated. This results in net inward migration of 23,000 persons. That was 46,000 in-migrations less and 11,000 out-migrations more than in 2005. Consequently, net inward migration decreased strongly from the previous year (–71%), following a decrease by just 4% from 2004 to 2005.
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Auf Widersehen, Pet

This, as many readers may well know, used to be the title of a UK TV sit-com about British building workers seeking to improve their fortunes by working in Germany, but now the times, it seems, have changed.

In 2004 more than 150,000 Germans reported to their town halls that they were going abroad—the highest number since 1884. The real figure is almost certainly much higher. Germany, once the economic engine of Europe, is on the point of becoming a country of net emigration. The museum in Bremerhaven may soon need a new wing with an aeroplane cabin or high-speed railway carriage, today's mode of departure.
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Catching Up?

One of the most fundamental assumptions on economic growth in the long-run is idea of convergence or catch-up growth. This is a process by which developing economies countries grow faster than their developed counterparts. The nature of this convergence process which should be seen in the context of neo-classical economics (new growth theory) depends on the overall assumptions of scale economies built into the models. This entry will not go into this in much detail but rather home-in on the case of the Eastern European transition economies, often also referred to as the lynx economies alluding to their comparison with the Asian tigers.
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Migration in Eastern Europe - Getting it Right?

Earlier this week the World Bank published a large report on migration and remittances flows in Eastern Europe and Central Asia. The report is interesting to read and most importantly in my opinion it fields a very impressive dataset on the importance of remittances flow from emigrants towards Eastern Europe in terms of the general macroeconomic environment. However, the report has some weaknesses and some sadly some notable ones which also why I saw the need to pick on the report a few days ago over at GEM. But also the Eastern Europe correspondent at The Economist Edward Lucas directs a critique of the WB report in the latest Europe.View column.
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Fertility and Migrants in Italy

This is just a snippet. In this post we had some interesting discussion on the impact of migrants on population dynamics in Sweden and Minnesota (see especially comments). One of the conclusions which I think we reached was that the impact of migration on fertility depended on the level of fertility in the origin country and on the proportion of migrants in the childbearing-age-population. So I thought this recent news from Italy might be of interest. 10% of babies now being born in Rome are children of non-Italian nationals, and 13 if you include those with at least one non-Italian parent.
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The Effects of the Ageing European Population on Economic Growth

Marty Feldstein has an article in the Financial Times today under the header "Immigration is no way to fund an ageing population" (or here). This is a strange coincidence since earlier this week I was busy posting on Italian Economy Watch about the boost given to economic growth in Italy in recent years by the growing numbers of immigrants who have been arriving there.
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Immigration, Demographics, and Economics

Over the past few years, I have studied demographics and the economics of globalization and practiced to what extent I could through my jobs. What interests me most about the current state of demographic change throughout the world – is the fact that because of globalization, for the first time international migration has become a significant variable in how these changes translate into economic growth. To put it another way, the graying of parts of the world and population explosions in others can both be mitigated by net positive or net negative international migration, respectively.
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Immigration Matters Too

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).
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The Alberta advantage

Edward mentioned yesterday the consequences that different rates of population change in different regions within a country can have on internal politics. Within Spain, as he noted, the fact that two of the regions experiencing the quickest population growth are the Spanish capital of Madrid and the nationalist and potentially separatist region of Catalonia is going to have interesting consequences for the future of Spanish federalism. Certainly, in Canada similar concerns over different rates of population change--especially changing fertility and immigration rates and the speed of language acquisition and loss--played a critical role in driving the growth of Québécois nationalism.
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Changing Perspectives On Immigration.

Views of immigration are changing. Back in the mists of time, when I first came to the conclusion that ongoing demographic changes were going to be important, the voices in favour of a reconsideration of immigration policy were few and far between. Perhaps the first and most notable of these voices was the UN population division. Now things are different, and a series of recent international conferences and reports highlighting the positive advantages of immigration as an economic motor only serve to underline the fact that discussion of this important topic is very much back on the agenda.
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Migration In Spain

Immigration into Spain is proceeding, as we probably all know by now, at a globally unprecedented rate. Randy has a post on this here, and I have a slighly different take on it here.

Two researchers who are working on this topic are Marta Roig Vila (of the United Nations Population Division) and Teresa Castro Martín (of the Spanish Council for Scientific Research). They gave a paper at last years IUSSP conference: Immigrant mothers, Spanish babies: Longing for a baby-boom in a lowest-low fertility society.
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Immigration Matters

In the past week the news about a further decline in the birthrate created quite a discussion in the German media which took me by surprise. For some reason the critical barrier which made people take notice was births slipping under the 700.000 mark. Actually this isn´t remarkable nor shocking, at least for anyone who has followed the matter for a few years. The population projections have predicted this trend for years and it is mentioned in countless reports and papers by many institutions, demographers, analysts and researchers.
The decline in births isn´t the issue here but the fact that the population has already started to decrease (slightly), mainly due to a lower net immigration. So I´ve decided to come back to this post and emphasize why it´s the immigration that matters.
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A four-letter model

At YaleGlobal, Sharon Noguchi writes about Japan's less-than-stellar treatment of their perhaps much needed immigrants.

Thinking a bit about this and David Coleman's position, I think the issue can be thought about in faux-formal terms, even if we don't have enough knowledge to predict the future - specially about the "soft" political and cultural parameters.
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Emigration: the private vs. the public domain

What motivates people to emigrate from high-income countries from an extensive welfare. The answers are actually a lot harder to find then for immigrants from low-income countries. This Tinbergen discussion paper "When the quality of a nation triggers emigration" offers some insights by comparing motivations of potential emigrants in the private domain (e.a income situation) with the public domain (or the perception of it) in the current situation of the Netherlands. How the public domain is "perceived" can be a far more significant factor than for example a negative factor like a potential fall in income when emigrating to another country.
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Latino Migration: A Tale of Two Industries?

Well Latinos are in the news again this week. There are estimated to be some 11 million undocumented Latino migrants currently living and working in the United States, and what to do to resolve this situation is clearly a major headache for the current republican administration. But beyond this, the huge and extended flow of migrant workers into the US is changing the demographic face of the country. So first-off let's take a look at some reality-check factoids:
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Migration and Population Growth

International migration may soon account for almost all population growth in the developed world according to a United Nations study prepared for this weeks meeting of the Commission on Population and Development (I can't find a link to the study itself, if anyone else can please post in comments):

The reports suggests there are:

191m migrants globally, up from 175m in 2000 and 155m in 1990. That represented a slowdown in growth compared with the 15-year period between 1975 and 1990, which saw 41m new migrants. But between 1990 and 2005, 33m out of 36m migrants moved to the developed world, with the US alone gaining 15m and Germany and Spain each accounting for 4m.
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Does the Canadian example work for France?

Sarkozy's proposed new immigration policies for France are somewhat flattering for Canada, inasmuch as observers have pointed to Canada's immigration policies and inflows as ideal situations for France.

France's plan to cherry pick immigrants with the skills it needs is a step in the right direction if the euro zone's second biggest economy wants to remain competitive, according to analysts.
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Message To Central Bankers: Target Median Ages!

Central bankers are all in a flurry right now, since they don't seem to be any too sure what it is they should be targeting, inflation or monetary aggregates. Well I have one piece of advice for them: keep your eyes on both of these (provided that is you know how to interpret the signals) but add one more objective (or pillar) to your list - population median age.

Sounds daft, doesn't it? What a silly idea Edward!Well no actually, it isn't. And the fact that most people in the macroeconomic community haven't appreciated the role and importance of this metric is one of the principal reasons why many observers are at such a loss to understand what is happening in Germany and Japan right now, and why the proponents of the so-called 'Goldilocks' recovery are discovering that there just isn't enough honey in the pot to go round (obviously some of it was eaten by one of those bears I mentioned in the last post). For a brief introduction to the macroeconomics of this problem, see this post from Claus (and then drill as far down as you want, one thing is for sure, you won't reach Australia, since Australia isn't on the list of countries with a preoccupyingly high median age, at least not just yet it isn't, which is why over at the Australian central bank they may like to take note of what I am saying while there is still time).
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Immigration, Ageing Populations and Economic Growth

Marty Feldstein has an article in the Financial Times today under the header "Immigration is no way to fund an ageing population". This is a strange coincidence since earlier this week I was busy posting on Italian Economy Watch about the boost given to economic growth in Italy in recent years by the growing numbers of immigrants who have been arriving there.

Now since I am arguing that immigration is in fact a significant policy tool which can be leveraged to address the problems raised by population ageing, a clear clash of opinions would seem to exist. So who is right here?
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