Can migration address the workforce needs in the care sector for aging populations?

Amidst the ebb and flow of life, Felix and Cris, an elderly couple in their mid-90s in Pinilla Trasmonte, a remote village in Spain, find themselves at a pivotal moment. Even the simplest of tasks feel like mountains to climb, highlighting the undeniable truth of their aging journey.  However, finding an affordable care facility remains a daunting task, despite the ever-present reality of requiring assistance for daily activities and medical support.  

The challenge of ensuring access, quality and affordability of elderly care

In Spain—as in other high-income economies with rapidly aging populations—long waiting lists are common for accessing both private and public elderly care facilities.  Facilities often struggle to fulfill a mandated minimum number of care workers per resident due to shortages of skilled professionals in the health and care services. Moreover, the lack of streamlined operations and interoperability of information systems in social services across different levels of government and health facilities hinders the exchange of information, making it difficult for the elderly to understand eligibility requirements and navigate application processes.  

Despite government subsidies, access and quality concerns are compounded by affordability challenges. The facility in Burgos where Felix and Cris are undergoing rehabilitation costs approximately 2,400 euros per person per month for their level of care. While government subsidies cover about one third of the cost, the balance remains unaffordable for most families.

Imbalances in the global labor markets

As of May 2023, there is a gap of 450,000 unfulfilled job openings in Spain (including 20,000 just for the health care sector). For 2020-2030, the population between 25 and 49 years old is expected to shrink by 5.8 percent, while the population over 64 years old is expected to grow by 6.2 percent.

Similarly, the share of those aged 65 and above is projected to rise from 18 to 27 percent across the Organization for Economic Cooperation and Development, with those aged 80 and over doubling from 4.8 to 9.8 percent.  The High-level Commission on Health Employment and Economic Growth projects a surge in demand for health workers in the coming years, resulting in approximately 40 million new health worker jobs by 2030, primarily in high- and middle-income countries. Simply put, increasing demand for care and dwindling supply pool may lead to burnout. Women bear the burden of care work, both because most care workers are women and because at home care often falls on daughters due to social norms.

Rebalancing excess supply

In contrast, individuals like Claudia in Bolivia face challenges of many lower-middle income countries with high informality, leaving workers in low quality jobs and with limited or no social protection.

Despite her education, Claudia is trapped in informal work, struggling financially, lacking social protection, and facing an uncertain future with limited job prospects.

Informal sector workers like Claudia could fill care jobs for the elderly, like those needed by Felix and Cris, in high-income countries if given the opportunity and skills portability. Migration from developing to developed countries can address workforce needs, especially in health care and the care services sector for aging populations. 

The case for global skills partnerships (GSPs)

The World Development Report 2023 highlights a demographic arbitrage opportunity to rebalance global supply and demand. Aging economies must address pension system deficits, labor shortages, and improve migrant integration. GSPs aim to create win-win solutions by investing in human capital, establishing international labor market intermediation systems, and fostering global dialogue and partnerships while addressing migration challenges, such as funding for matching costs, and brain drain risks.

Under these schemes, the destination country underwrites training for potential migrants to acquire necessary qualifications and accreditation needed at both origin and destination countries.  This training occurs in the country of origin, benefiting newcomers to the domestic labor force and potentially students, transforming the risk of “brain drain” into a “brain gain.” Private sector involvement is crucial in understanding local and overseas demand and developing skills demanded by both. Examples of collaboration include Belgium and Morocco  in an information and communication technology focused GSP, Germany and Kosovo in the construction sector, and Australia and the Pacific Islands for aged care.

Portability of social insurance benefits for migrants

Long-term aspirations of migrant workers should be considered, as many may desire to return to their home countries. Offering participation in pension schemes with portable benefits through social security agreements can support their transition and ensure access to their benefits upon return, providing both financial security and contributing to their home countries through a reliable pension income.  For instance, Albania has established social security agreements with over 10 countries. Additionally, Rwanda has spearheaded flexible voluntary savings schemes that also allow citizens residing abroad to participate. As more countries embrace similar schemes, prioritizing a design that offers retirement savings opportunities for their migrant populations abroad is crucial.

Bridging borders

In the quest to bridge borders and build futures, the stories of Felix, Cris and Claudia highlight migration’s potential in addressing the workforce needs of aging societies in the elderly care sector, offering hope for a brighter and more inclusive future. The World Bank acknowledges these challenges and is dedicated to supporting countries in addressing them. Through multi-country technical assistance and policy advice, in collaboration with development partners, and academia, the World Bank is committed to support the design and/or implementation of 10 GSPs in 2024.

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