Home > Uncategorized > Europe: let’s discuss emigration, not immigration

Europe: let’s discuss emigration, not immigration

Natural

Should European countries accept free in-migration of people? Hmmm… many countries should focus on the problem of how to totally discourage out-migration.

In many countries the young and well-educated have left in droves because of boom-bust crises followed by austerity, this despite unfavorable demographics. Latvia, Estonia, Bulgaria, Lithuania are examples – but even in Germany the ‘Harz-reform’ of around 2000 was followed by high net out-migration of Germans.  States should be applying all macro- and micro-economic tricks to keep the millennial at home (including providing cheap houses)! If there is any countries which should welcome Brexit it are Poland and Lithuania!

Looking at it from a more quantitative angle, it is clear that it is a question of years, not decades, before the population of Turkey (77 millions) will surpass the population of Germany (81 millions), even taking net immigration into account. But will the young Turks solve the ever mounting German demographic and age related burden? Oh no. Not a chance. The fertility rate in Turkey is with about 2,1  at replacement rate and the relatively fast increase in Turkish population is partly due to improvements in health and life span as well as to the relatively large size of child bearing generations. It won’t be long before population growth in Turkey will taper off (it is in fact already tapering of, fertility reached replacement rate somewhere between 1995 and 2000 and the child bearing generation will soon start to stabilize). So, don’t count on the Turks. The (historically) more amazing development is taking in Germany (and Ukraine and Russia and….). Between 2009 and 2014 ‘natural’ population decline in Germany was about -1.000.000. Which is remarkable. And I have no idea why French and British mums are having much more baby’s – the fertility rate in these countries is about 2,0. But be that as it may – the German population is declining at a considerable rate and this rate is set to increase. People are scarce!

For about 250 years (the potato!), European population growth was, barring wars, positive and often strongly so. This has been changing. Around 1965, the fertility rate in Germany plummeted to a very low rate of 1,4 births per woman (2,1 children per woman is considered the ‘replacement rate’, i.e. the rate consistent with a long run stability of the ‘natural’ population). Around 1975, the fertility rate in the Netherlands plummeted. Around 1985, fertility rates in South Europe plummeted to levels of sometimes 1,2 (Portugal!) while in between fertility rates in Eastern Europe went down. And in the nineties, the Turkish fertility rate, which had already come down from extreme levels of about 6, reached replacement rate. As a logical consequence, the ‘natural’ German population is declining, many other populations are or will be following.

There is a golden lining to this: small populations are much more ‘sustainable’ than larger populations. But there are problems, too. The number of 0-5 year olds in Germany is not even 50% of the number of 50-55 year olds, in Portugal this ratio is heading to about 40%! Even when pension ages increase to about 70, there will be a financial problem to pay for pensions while increasing pension ages will do nothing to diminish the ‘care burden’! And the present young generation is beyond redemption. Suppose that Portuguese twenty and thirty  somethings suddenly get a lot of children again. This will mean for them that they will face as well a historically high burden when it comes to care for the elderly as well as an increased burden to raise children. There is of course also a political side to this, Putin for one will be very aware of developments in Turkey (and Germany). The macro-economic side: it makes it even more incomprehensible that countries like Latvia, Estonia, Lithuania, Portugal, Greece and Spain embraced austerity. Austerity pushes young people over the border – and increases the demographic burden. And don’t count on the Turks. The real discussion should not be about immigration. But about emigration.

  1. jlegge
    July 1, 2016 at 11:40 am

    The idea that the elderly are placing an intolerable burden on the young is deeply flawed. Those under 25 are just as expensive to maintain as those over 70, if not more so. The reduced cost of supporting the young, plus even modest productivity growth, means that the old can be supported at least as generously as at present while those of working age enjoy rising real disposable income. I ran the figures for Australia: http://www.johnmlegge.com/blog/debunking-intergenerational-war/

    The disposable income per active worker can rise by 50 percent or so by 2050 while the young can still enjoy free education and the old their pensions and health care. Equating a future rise in marginal tax rates with a fall in real disposable income over an equivalent period is a display of statistical incompetence at best.

    • merijnknibbe
      July 1, 2016 at 1:36 pm

      For many countries I agree with you. But countries like Portugal, with a 1,2 fertility rate, do have a problem. And probably we agree that 23 and 24 is a pretty old to be dependent!

      • jlegge
        July 2, 2016 at 8:19 am

        Matriculate to Uni at 18; get first degree at 21; get basic postgrad qualification at 22; spend a year as low (or un) paid intern: we get to 25 no worries.

        Trade qualifications a little quicker but not much; many trades need multiple certificates.

  2. delta
    July 1, 2016 at 5:33 pm

    You are, in principle, right. But this is not what is happening and a case may be made that despite the scarcity of young people, their wages and economically measurable value will go down. Most principally because aging economies will be economies of lower activity. Hence smaller, on permanent stagnation or downtrend trend and subject to deflation as has been the case in Japan for 2.5 decades now. I already saw this happening in Japan 10 years ago, it was shocking. Essentially what happens is that when the pie shrinks people start fighting more over it, and some of the old guard is better placed to benefit in these conditions. It’s not just that they are experienced or good at what they do, it’s mostly just that there is more of them. Hence a bigger chance for holding important positions by their age group. And this has then downstream network effects with benefits accruing again to those better connected in within their age cohort. The situation is an overall quadraple-whammy for my generation. 1) many graduated in a long-running depression (as a millenial from EE, who regularily visits family in Latvia and works in Germany – I can assure You the whole of EE is barely out of depression, at least at purchasing parity terms), 2) forced to fight for shrinking pool of entry-level positions, 3) forced to delay houshold formation, 4) forced to live with these consequences in further declining economies. Essentially my generation is completely prevented from any socioeconomic progress and will either accept complete impoverishment or move anywhere else.

  3. July 1, 2016 at 6:15 pm

    With respect to Brexit, I cannot understand the confusion about immigration. Britain and members of the EU fear the influx of migrants from outside the EU. Britain took in many from its former empire, West Indies, African countries, Hindustan, etc. The Brexit migrant problem is only about people coming from countries inside the EU. EU countries that dread the influx of migrants from Africa, the middle east, Afghanistan, Iran readily accept free movements of people inside the EU. This free movement does not present the difficulties stemming from racial and religious differences. In America the influx of Europeans in the late 19th century presented no racial problems nor religious (except for anti-Catholicism) and they all became Americans, these new immigrants, in two generation. The assimilation of different races and nonChristians has been the problem, and is the problem in Europe.

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