This is the title of a new column by the lead economic columnist for the Financial Times Martin Wolf that reflects some of my papers in discussing a challenge faced by all rich industrial countries: ageing. Ageing populations are leading these economically advanced countries into ratios of the labor force to historically unprecedented low levels.
The attached recent paper of mine (which is still a working draft and, as such, has not yet been refereed or published) documents the implications of the standard UN Population Division demographic projections for 31 rich industrial countries. Using the UN World Population Projections “zero migration” scenario and the ILO data on labor force participation rates I show that in the absence of migration and with constant labor force participation rates (by age and sex) by 2050 most of those ageing, rich industrial countries will move into ratios of labor force to population over 65 that will create massive economic and fiscal challenges. For instance, this ratio in Spain falls to 1–one worker for every person over 65 and in Italy it falls to .88 and the Europe wide average falls to 1.34.
This is the sense in which “immigration” (which I use in quotes because I want to analytically distinguish between modes of labor mobility) is “essential.” I don’t think anyone believes that anything like Spain’s existing social contract for its elderly population can be sustained by one worker for every person over 65 (until as recently as 1980 this ratio was above 3 in every country).
The paper emphasizes that the very pressures that make “immigration” essential also make it “impossible” politically. If countries were to make up for the smaller native born labor force through standard “pathway to citizenship” immigration this would to ratios of foreign born to native born among citizens about three times as high as that of the USA at its peak in the “open borders” of the early 20th century. It is hard to look at the recent elections in for the European Parliament or the ongoing 2024 Presidential election in the USA can conclude there is a political climate conducive to ratios of immigrants (who, of demographic necessity will have to come from the Global South in the aggregate) many-fold higher than the current levels.
I argue that a potentially solution to the tension that “immigration” is both essential and impossible is to shift to acknowledging that the question: “Who is allowed to legally reside and work in our country?” has not just two but three possible answers. One answer is “those who we (current citizens and voters) see as the future of us–those admitted on a direct (if perhaps lengthy and contingent) pathway to citizenship.” Another current answer is “those we allow as movers of distress (refugees, asylum seekers).” A third answer, which is already present in at least some form in nearly all countries is “Those who are allowed to reside and work in our country on a contractually time-limited basis.” The paper (together with an earlier companion paper focused on the politics) argues that a massive expansion of rotational labor mobility is a politically possible and administratively pragmatic.
And, and the underlying motivation of my engagement as a development economist, is that the calculations in the paper suggest that the annual gains to workers (and by extension their families and loved ones) in the Global South, workers who would otherwise lack attractive employment options, of large scale rotational labor mobility are in the trillions of dollars annually. The potential gains to development objectives from labor mobility are orders of magnitude bigger than the entire aid industry.