Population aging, migration, and productivity in Europe

Guillaume Marois (), Alain Bélanger and Wolfgang Lutz ()
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Guillaume Marois: Asian Demographic Research Institute, Shanghai University, Baoshan, Shanghai 200444, China; Wittgenstein Centre for Demography and Global Human Capital (University of Vienna, IIASA, VID/ÖAW), International Institute for Applied Systems Analysis, 2361 Laxenburg, Austria
Alain Bélanger: Wittgenstein Centre for Demography and Global Human Capital (University of Vienna, IIASA, VID/ÖAW), International Institute for Applied Systems Analysis, 2361 Laxenburg, Austria; Centre Urbanisation Culture Société, Institut national de la recherche scientifique, Montréal, H2X 1E3 Canada
Wolfgang Lutz: Wittgenstein Centre for Demography and Global Human Capital (University of Vienna, IIASA, VID/ÖAW), International Institute for Applied Systems Analysis, 2361 Laxenburg, Austria

Proceedings of the National Academy of Sciences, 2020, vol. 117, issue 14, 7690-7695

Abstract: This paper provides a systematic, multidimensional demographic analysis of the degree to which negative economic consequences of population aging can be mitigated by changes in migration and labor-force participation. Using a microsimulation population projection model accounting for 13 individual characteristics including education and immigration-related variables, we built scenarios of future changes in labor-force participation, migration volumes, and their educational composition and speed of integration for the 28 European Union (EU) member states. We study the consequences in terms of the conventional age-dependency ratio, the labor-force dependency ratio, and the productivity-weighted labor-force dependency ratio using education as a proxy of productivity, which accounts for the fact that not all individuals are equality productive in society. The results show that in terms of the more sophisticated ratios, population aging looks less daunting than when only considering age structure. In terms of policy options, lifting labor-force participation among the general population as in Sweden, and education-selective migration if accompanied by high integration, could even improve economic dependency. On the other hand, high immigration volumes combined with both low education and integration leads to increasing economic dependency. This shows the high stakes involved with integration outcomes under high migration volumes.

Keywords: population aging; immigration; projection; labor-force participation; microsimulation (search for similar items in EconPapers)
Date: 2020
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