The ‘immigration dividend’ in a world of demographic turbulence

The following essay was originally compiled for the Mixed Migration Review 2019 and has been reproduced here for wider access through this website’s readership.

This essay explores the multiple links between demographics and human mobility, including mixed migration. Across much of the world, a demographic sea-change is underway: in many developed countries, the “demographic dividend” is being irreversibly eroded as the number of ageing societies grow and as the “baby boom” turns to a “baby bust”.[1] In other regions, child mortality rates have plummeted while fertility rates remain persistently high. This discrepancy offers ample opportunity for countries to better recognize, and take fuller advantage of, the “immigration dividend” – the wide range of benefits that can accrue to states which welcome, rather than restrict, new arrivals.[2] The extent to which these opportunities will be taken, however, is far from clear. 

To establish the demographic context for this exploration of mixed migration, the first part of this essay offers a summary of key issues drawn from the extensive literature on the subject.

Rising global population, for now

For the last thirty years or more, the global population has been steadily increasing by an annual average of more than 80 million people. The UN predicts a rise from the current 7.6 billion to around 9.8 billion in 2050, and then a peak at just over 11.1 billion in 2100, from when it will start to level off and possibly decline.

“Within 10 years, two thirds of the world’s population are expected to live in countries where women will have fewer than 2.1 births on average.” Places with high fertility rates, such as various African and Middle Eastern countries, will continue to make massive contributions to the continued growth of the world’s overall population. Increased longevity and pyramid-shaped population structures (the age distribution of a population) are also adding to the continued population increase.

Population of the world & regions, 2017, 2030, 2050 & 2100 according to the medium-variant projection

Source: UNDESA (2017). World Population Prospects: The 2017 Revision, New York, United Nations.

A recent book contests the UN’s trajectory forecast, predicting that the world’s population will most likely peak at around only nine billion between 2040 and 2060 and that by the end of this century “we could be back to where we are right now” and that this decline will be “one of the great defining events of human history.”[3] The authors’ use of data has its critics, but the inevitability of eventual population decline is not in doubt, not least because global fertility rates decreased by 49 percent between 1950 and 2017, with drops recorded in all countries and territories during that period.

Stark regional and country variations

Some 35 countries had decreasing populations in 2017, while 57 had population growth higher than the two percent “replacement” rate. “Country variation in population growth rates is driven to a large extent by wide variations in fertility rates and to a lesser extent by migration rates.”

Rapid and irreversible fertility decline

The key drivers of global fertility decline are reckoned to be here to stay. Already, fertility rates far below replacement levels have been the status quo for decades in high-income countries, despite various interventions and natalist policies.[4] Evidence suggests that government policies that encourage couples to have more children are futile.[5] The “low-fertility trap” ensures that, once having one or two children becomes the norm, it stays the norm. Low fertility is closely associated with national wealth and GDP, which in turn are linked to higher outcomes for education, as well as empowerment and employment for women – and are also closely associated with urbanisation.

Longevity and the age of ageing

Increased ageing precedes population decline. Inevitably, populations with a high proportion of older people will decline due to “generation turnover”. Countries such as Germany and Japan have already seen a decline of approximately 50 percent in the numbers of young adults and children. As fertility declines and life expectancy rises (including due to a reduction in child mortality), the proportion of the population above a certain age rises as well, causing population ageing; this is occurring throughout the world. The current number of over-60s is double what it was in 1980 and will double again by 2050 when it is expected to reach around 2.1 billion – almost a quarter of the projected population at that time.

Old-age dependency ratio of G20 countries in 2015 and 2050 (projected)

Note: The old age dependency ratio is the ratio of the 65+ population to the working age population (15 to 64).
Source: UNDESA, World Population Prospects. 2019 International Migration and Displacement Trends and Policies Report to the G20

Urbanisation as birth control

At present, approximately 55 percent of the world’s population lives in urban areas, a proportion that is expected to increase to 68 per cent by 2050. By 2030, the world is projected to have 43 megacities with more than 10 million inhabitants, most of them in developing regions. “Urbanisation is the strongest contraceptive known to man,” wrote demographer Sanjeev Sanyal in 2013. “Every known society has witnessed large declines in birth rates as it has urbanised, irrespective of cultural background.” Sanyal was echoing the findings of a wide variety of field studies about rural-to-urban migration in numerous countries over different periods starting in the 1930s.

Not all urbanites were born in urban centres – many migrated from rural areas, while others moved internationally but predominantly settled in host countries’ cities. UN projections show that urbanisation, combined with the overall growth of the world’s population, “could add another 2.5 billion people to urban areas by 2050, with close to 90% of this increase taking place in Asia and Africa”.

Defusing the “population bomb” and the great economic reversal

In 2015 the IMF warned that “shrinking populations pose a grave fiscal threat” and that if substantial age-related economic reforms were not implemented, the fiscal consequences would be “dire”. Some note that demographic trends may account for increased divergence between advanced and emerging economies over the short term, but that over the longer term they will act as a “headwind” (economic slowdown leading to economic reversal) at a net global level. Raising taxes, cutting entitlements, upping the retirement age, and boosting immigration are some potential mitigation policies but all have financial and economic implications, and risk generating “conflicting social tensions”.

Africans ascendant

Despite continued reduction of fertility levels in Africa, and although child mortality rates also continue to drop, rapid population growth is anticipated across the continent. After 2050, it is expected that Africa will be the only region still experiencing substantial population growth. The share of global population residing in Asia is currently estimated to be 60 percent, but it is expected to fall to around 54 percent by 2050 and then to 43 percent by 2100. By contrast, according to UN estimates, Africa’s share of global population, which is projected to grow from roughly 17 percent in 2017 to around 26 percent in 2050, could reach as much as 40 percent by 2100.

Even if African fertility declines faster than the UN predicts, all future scenarios show Africa playing a central role in shaping the size and distribution of the world’s population over the next few decades. Before 2100, the populations of 33 African countries, most at the lower end of development rankings, are very likely to at least triple. “Among them, the populations of Angola, Burundi, Niger, Somalia, the United Republic of Tanzania and Zambia are projected to be at least five times as large in 2100 as they are today.”

Given the expected high population of Africa the remainder of this essay will discuss the demographic migration nexus with special focus on the continent.

Africa’s demographic dividend

Africa’s demographic dividend is not guaranteed unless factors such as good governance, economic growth, infrastructure and investment are in place. What may be more likely, even if many of these factors are in place, is that large numbers of youths will be jobless or under employed in their countries of origin. The UN warns that “the concentration of population growth in the poorest countries will make it harder for those governments to eradicate poverty, reduce inequality, combat hunger and malnutrition, expand and update education and health systems, improve the provision of basic services and ensure that no-one is left behind.” There are critics of such pessimistic approaches, but it is clear that many countries in Africa will continue to face significant development challenges as their populations increase in size.

If the fuller benefits of the demographic dividend are not harnessed domestically due to poor governance, conflict and poor infrastructure, etc. the rising population, especially of those of working age and younger, could be problematic in some countries. Dividends from immigration, then, may be the alternative as African workers become keen to meet potentially increased demand for migrant labour globally.

It is not clear whether a dividend arises from large refugee populations, unless they are allowed to work and integrate more fully, although this too can add to local tensions in resource-scarce contexts. Mixed migration could in such a scenario increase and become more desperate.

The ‘immigration dividend’: future impact & opportunities

The absence of a demographic dividend could translate into an “immigration dividend”. In high income countries, lower fertility and increased longevity, coupled with a decrease in the proportion of the population that is of working age, are on-going trends that are expected to continue.

Meanwhile, in locations with large populations, given the world’s increasing globalisation and connectivity, more and more people will learn about life in Europe, the United States and elsewhere from their networks and the media, and with even modest economic growth will have the resources to consider moving. “While most will simply move to larger cities in their own country or to other countries in Africa or the Middle East, most who are surveyed say that their first choice of destinations is Europe or the United States.”

Increased aspiration to migrate is therefore likely, not least because African economic prospects will improve, and evidence shows that capability to be mobile increases with national prosperity. Additionally, while urbanisation may reduce population growth (thereby potentially slowing overall emigration) it is often a first step towards international mobility, as people acquire the requisite resources, networks, and aspirations in urban areas. Equally, fast-growing cities (combined with environmental factors – discussed elsewhere in this report) with larger populations of internal migrants and urban refugees could also generate problems and pressure (in terms of competition for housing, health, sanitation, and impact on crime potentially) which may prompt refugees and migrants to leave in mixed migration movements.

As the graph below illustrates, the proportion of people of working age within global migrant flows is higher than in the world’s total population – and this gap is set to widen over coming decades. Such migrants are well-placed to meet the labour demand arising from the concurrent ageing and shrinking of populations in destination countries.

Working-age cohorts within migrant and total populations

Source: Citi Research

Africa’s growing youth bulge has led one analyst to insist the ‘scramble for Africa’ was at the end of the nineteenth century … [with] young Africans seeking a better life on the Old Continent, the island of prosperity within their reach.” Europe’s most prudent response to this, the analyst argued, ought to consist of “migratory policies of ‘good neighbourhood’ equidistant from guilt-ridden self-denial and nativist egoism.”

Another recent study, by the EU, pointed to similar correlations but was more cautious in its conclusions:

“…at the moment there are no signs of an imminent exodus [from Africa] but […] in a medium-term perspective both development and demographic factors are likely to determine an increase of migratory pressure from Africa. What is not known is if this migratory pressure will manifest itself mostly within Africa or whether it will ‘spill over’ in international migrations directed in particular towards Europe due to geographical proximity and existing economic and migration ties.”

One statistician-demographer went even further, dismissing the idea of the “scramble for Europe” as “an exercise in economic speculation and sensationalist communication, rather than a demographic demonstration.” Moreover, some see its very geographic focus to be misplaced:

“…the largest emigration flows towards rich countries tend to be from middle-sized, middleincome nations such as Mexico and Turkey, or the countries of North Africa, the Balkans or Central Asia. And above all, from countries where fertility is already falling rapidly – which is certainly not the case in sub-Saharan Africa.”

And despite the doubling of Africa’s population since the late 1980s, monthly Mediterranean crossings were “never more than a few thousand” outside of exceptional years such as 2014-2017. “The image of millions of Africans sitting on their suitcases is not serious.”

Nevertheless, the failure of African governments and economies to provide jobs for their growing working-age that a
“scramble for Europewill become as inexorable as populations creates potentially dangerous dynamics that could exacerbate extremism, militancy, and civil conflict, which also serve as migration drivers. In Tunisia, for example, high youth unemployment has resulted in a very high rate of emigration aspirations and outcomes but also the highest rate of people joining Islamic State. In Mali, those aged between 18-35 dominate the ranks of the county’s many armed groups, to which they are drawn due to a broad range of “deteriorating circumstances”, including unemployment, governance vacuums, and widespread insecurity. Similarly, in northern Cameroon, lack of development and joblessness have served as a boon for Boko Haram’s recruitment of young citizens.

Rapidly rising population numbers could therefore contribute, under certain conditions, to the fomenting of social unrest, resource competition, and greater conflicts resulting in yet higher numbers of refugees from Africa (and the Middle East). In the absence of durable solutions, this could result in humanitarian crises and further regional social tensions. Unless these growing populations and disproportionately large youth cohorts find work and security they are also likely to swell the numbers in mixed irregular flows – a view shared by some of those interviewed and featured in this report.

The impact of global imbalances

As we have seen, global imbalances in the short and medium term might increase demand for labour migrants in countries with declining working-age populations. Equally, the economic value of refugees might be better recognised, leading to increased resettlement and integration. However, those impatient to move, or those excluded from any new labour migration quotas or refugee resettlement schemes, are likely to continue to attempt to move irregularly in mixed flows, not least as the diasporas – who are important enablers of migration – of particular nationalities increase. Alternatively, if openness to migration and refugee integration increases significantly, there could be a spontaneous reduction in irregular mixed migration. Conversely, the policy compromise (similar to Australia’s position in recent times) could be that as legal migration expands, unwanted irregular movements could face tighter restrictions almost to the point of elimination. This could entail a withering away of mixed migration, or at least push the phenomenon even further underground to more dangerous routes and circumstances for people on the move.

These imbalances will be stark, potentially offering opportunities to populations with surfeit labour. Labour force growth in sub-Saharan Africa will occur much faster and more substantially than in any other region of the world, including China and India. By 2040, based on current estimates, working-age groups will be shrinking everywhere in the world, except in sub-Saharan Africa. High fertility and falling infant mortality rates mean the additions to Africa’s total population are and will continue to be overwhelmingly young people, long after rates of other regions start to decline. One of Africa’s greatest comparative advantages will therefore be a surfeit of an increasingly rare global commodity: young workers.

The implications for potential migration are clear: the surfeit of young labour could be sucked up by economies with shrinking workforces, particularly if African states fail to accommodate all the young people entering the labour markets. While migration from North African countries has been relatively high, sub-Saharan Africa has so far been a modest contributor to global labour migration, and only a few countries there have played a part. Although the number of sub-Saharan Africans seeking to move to the United States and Europe has been steadily rising, the demographic predictions show the potential for substantial increase in the future.

Will global ageing favour migration?

The share of demographic dividend that is due to Africa and other populous regions will doubtless include benefits accrued from supplying a significant part of the future labour force to countries with ageing populations, particularly in sectors where robots and AI are slow to replace humans.

The ageing trend is global, and migration will play an increasingly vital role in coping with the transition to ageing societies and easing the burden on care and social security systems. If governments continue to limit regular channels for migration in a context of increased border control we can expect irregular markets to remain active, with smugglers facilitating mixed migration flows to meet demand. As countries age, “the economic imperatives for migration may be expected to become more significant although, […] there currently appears to be very little correlation with public attitudes; some of the countries with the lowest fertility rates in the world being among the most opposed to migration.”

One reason Japan is a global pioneer in developing robots designed to care for the elderly is that for every Japanese citizen over the age of 65, there are only two aged between 15 and 64: its potential support ratio of 2:1 is the lowest in the world, yet Japan remains fiercely resistant to immigrant labour that could ease the burden of elderly care.

To fully offset the effect of population ageing in developed, low-fertility states, the scale of international “replacement migration” would need to be unprecedently and unfeasibly high. From the point of view of destination states, such migration would at best mitigate the ageing problem and simply buy governments time (because migrants also age and benefit from increased health, etc.) to explore other policies and reforms. From the migrants’ point of view, because ageing will affect so many countries, increasing demand for migrant labour, migrants may find themselves in a seller’s market, with multiple options. This also implies migration policies would change to allow more regular migrants and this in turn may reduce the pressure to migrate irregularly in mixed flows.

The anticipated economic reversal

Another scenario (envisaged by the IMF – see above) is that population decline in the global North causes substantial economic slow-down, which, coupled with increased automation of jobs across a wide range of sectors, could reduce demand for certain labour migrants. In this scenario, the appetite to resettle and integrate greater number of refugees could also diminish, creating severe problems for refugees in terms of protection and durable solutions. The subsequent restrictions on legal pathways for migrants and refugees could significantly swell the rank of those using irregular pathways in mixed flows.

Managed migration and an uncertain prognosis

As we have seen, there is a correlation between population growth and migration aspiration, but it is not necessarily direct or proportional. Additionally, greater pressure on natural resources such as land and water could lead to more displacement and/or conflict and therefore more refugees. If legal pathways are further restricted for migrants and refugees, irregular migration using smugglers would logically grow, but, again, it cannot be assumed that the correlation would be linear.

Demographic changes have “shaped the modern world” and there is no reason to believe their influence will wane in the future.[6] Dealing with population decline will be a central policy challenge for a substantial number of countries over the next few decades. One policy solution is to import replacements and regularise the irregular.

Many have argued that if future migration is controlled in an orderly manner and supplemented by investment and specific training suited to host country needs, the potential number of migrants would be manageable and desirable economically in destination countries. Such an “immigration dividend” consists not only of economic prosperity, but also national security, technological progress and cultural diversity. The 59 million people who migrated to the United States over the last 50 years have profoundly and dynamically benefitted the economy and transformed its demographics, and will continue to do so up to 2065. Indeed, as mentioned, there may be intense global competition for talented migrants as emerging economies outbid OECD countries to attract migrant workers, both regular or irregular. Countries that are more socio-politically averse to migrants while urgently needing their labour risk missing out on economic opportunities.

Other research suggests that regular and expanded migration could also offer a democratic dividend for departure countries, as migrants’ “political remittances” of democratic ideas, knowledge, values and expectations contribute to development and stability. Provisions for access to high-skilled migrant labour are already being made by most countries of the global North and this is likely to continue, contributing to “brain drain” and creating an imbalance between increasingly useful high-skilled migrants and less sought-after low-skilled would-be migrants. How will these trends affect mixed migration and what will be the future role of smugglers and opportunities for human traffickers in such scenarios? Generally, liberal immigration policies have been effective in sustaining population numbers in the US and UK for example, among others, but such policies have been accompanied by significant social and political challenges as currently witnessed dramatically in Europe, the US and Australia.

To combat depopulation, then, “nations must embrace both immigration and multiculturalism. The first is hard. The second, for some, may prove impossible”.[7] Still, demographic change seems bound to soften attitudes to migration at the national, regional and global level, setting the scene for – but not necessarily delivering – substantial population movements, including mixed flows.

[1] The United Nations Population Fund defines “demographic dividend” as the economic growth that can result from shifts in a population’s age structure, mainly when the share of the working-age population is larger than the non-working-age share.

[2] The term gained currency following the 2015 publication of an op-ed by historian and political speechwriter Ted Widmer: Widmer, T. (2015) The Immigration Dividend New York Times

[3] Bricker, D., & Ibbitson, J. (2019) Empty Planet: The Shock of Global Population Decline New York: Crown

[4] Natalist (=pro-birth) policies have been pursued in more than a dozen countries but their effect on fertility rates has generally been modest and it’s not clear any boost is sustainable. (See Murray, C. et al. (2018) Population and Fertility Collaborators Population and fertility by age and sex for 195 countries and territories, 1950–2017: a systematic analysis for the Global Burden of Disease Study 2017 The Lancet

[5] One exception is Denmark, where government campaigns, including one titled “Do it for mum”, backed by subsidies, have resulted in a rise in births since 2015. See Sims, A. (2016) Denmark’s bizarre series of sex campaigns lead to baby boom The Independent

[6] Morland, P. (2019) The Human Tide: How Population Shaped the Modern World New York: Public Affairs

[7] Ibbitson, J. & Bricker, D., op. cit.