Yesterday’s article
in the FT on the departure of Chinese migrants from Italy as the Italian
economy grinds to a halt is an important wake-up call about the limits to
solutions to one of the most vexing demographic problems faced by the developed
world. As countries get richer, they tend to have fewer children, which in the
absence of mitigating forces, means that populations age. With fewer people in
the labor force relative to the elderly, the dependency ratio grows and puts
social welfare systems under enormous pressure. Southern Europe and East Asia
are among the places with the lowest birth rates and most rapidly aging
populations on the planet.
One of the typical policy prescriptions for such countries
is that they need to embrace
immigration to bolster their shrinking population numbers. Japan,
Europe,
just about everybody with their demographics falling off a cliff, are urged to get
over their historical aversion to outsiders and advised that their last, best
hope is a wave of newcomers.
In spite of the unease with foreigners that many attribute
to the citizens of Southern Europe, countries like Spain,
Italy and Greece
have relatively high proportions of immigrants as part of their total
populations. 12% of the Spanish population is comprised of immigrants, 8 % of
Italy’s and while Greek data collection is flawed, reliable estimates put it at
perhaps 10%, though it is likely that more immigrants to Greece are there in
the hope of eventual transit to more prosperous economies farther north. Even
assuming away a xenophobia that characterizes many of these countries, it turns
out that they may not be able to continue to attract immigrants even if they
wanted them. With weak economies, immigrants
are pulling up stakes and going home or moving on.
While an outflow of immigrants may in some very small
measure ease the short term crush of unemployment, the situation highlights
another of the ways in which the crisis has such long-term consequences. Southern
Europe, without the resource of a dynamic economy of say, a Hong Kong or
Singapore, to attract new workers, is likely to find that its economic problems
exacerbated by its demographic ones.
