This year, the Saïd Business School at Oxford University launches GOTO, an ambitious new project to focus attention on a particular topic of global import. The first topic is demography. For my first submission to the GOTO platform, I argue that a discussion of aging is incomplete if it leaves out the question of migration:
Birth rates and aging make up an important half of the story when it comes to explaining a country’s demography—but only half. The story of modern demographics cannot be written without looking at the safety valve of Western growth: migration. In 2010, 215 million lived outside of their country of origin; a number greater than the populations of all but four countries. Many of those migrants have moved from emerging to developed economies, often from former colonies to former colonial powers.
That movement of people has thus far staved off demographic disaster in Europe and North America. The US dipped below the replacement birth rate of 2.1 children per woman in 2008; without higher fertility rates among immigrants—which account for 60% of US population growth and today make up 12% of the country’s current population—the US would have dropped below the replacement rate much earlier. The top fifteen migrant host countries in Europe are home to 27 million immigrants, and in some European countries the population growth due to immigration is greater than that due to natural growth.
These waves of migration will continue to redefine the North American and European societies and economies. Already in the US, nonwhite birthsoutnumber births by the white Americans that today make up 78% of the population, and political swing states such as Texas are now majority-minority. In Europe, one estimate holds that that by 2060 close to 30% of Europeans will be foreign-born or have a foreign-born parent.
But North America and Europe cannot continue to count on immigration to stop their going over the demographic cliff. First, migration flows are slipping. Net migration to the US from Mexico, its largest source of immigrants, has dropped to zero; and the children of Indian immigrants have begun to move back “home.” This shift is driven by slow growth in the developed world, rapid growth in emerging markets, political failure of host countries’ politicians to reform immigration systems, and explicit efforts by developing countries to attract immigrants from their neighbors. Second, those that do move Northward are having fewer children: after the first generation, immigrant birth rates now trend toward those of their native-born counterparts.
What implications will this have for economies accustomed to a constant influx of cheap labor and—at least in the US—a history being able to attract the world’s great entrepreneurial minds? Industries that rely heavily on unskilled immigrant labor (agriculture, cleaning, construction) will pass on to their consumers the higher cost of labor. As medical care in Western countries gets more expensive, for example, more Westerners will (have to?) retire to developing countries with lower standards of living and cheaper medical care. On the other end, countries accustomed to inflows of highly skilled workers will now have to compete for brains with middle-income countries like Chile, which gives visas and cash to entrepreneurs from all over the world; and China, where US universities are opening up satellite campuses for both Chinese and international students. Those students see that seeking out opportunity means migrating to London, New York or San Francisco, but in Beijing, Mumbai, and Mexico City. If the Western world wants to deal with its ageing native populations, taking a hard look at its immigration patterns and policies is a critical intiial step.
In a previous version of this post, I described Texas as a political “swing state.” It will be, but it isn’t yet. Sorry. Thanks, MS.