Economic Crisis is affecting net migration rates in the European Union

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Eurostat just released the latest estimates of the European Union demography numbers . According to the report, “EU gained only 1.4 million residents in 2009. (See article)

However, the population change has decreased from 2’046,029 in 2008 to 1’366,372 in 2009 (-33%). This is explained by a decrease in the natural population change and in the net migration. The decrease in natural population change has been due to a slight decrease in the crude birth rate and a constant crude death rate. Hence the major factor responsible for the slowing population growth is the decrease in net migration.

Due to the global recession, migration to the EU slowed down in 2009, for a net migration of  1,464,059 in 2008 to 857,186 in 2009 (a 40% decline). The reduction in migration flows is due to employment losses in countries of destination (especially Spain, Italy, UK) and to more restrictive immigration policies devised by European countries (e.g. UK points system, Italy prohibition on access to health service for undocumented migrants, Spain’s reduction in the number of positions available for immigrants).

Spain experienced a large decrease in net migration from 418, 477 in 2008 to 57,577 in 2009. In Germany net migration also continues to fall. In order to deal with the economic downturn, Spain approved a “Voluntary Return Plan” for workers from 19 non-EU countries. However, the program has not been successful in getting migrants to return home. Many migrants have coped with the crisis by moving to other locations where they could still find jobs (e.g. Portugal). While migration flows have slowed down, migrant stocks continue to increase albeit at a slower pace, which explains the resilience of remittances despite the crisis.

It also seems from current data that crude birth rates are lower during this economic downturn, especially in Spain (10.8 per thousand in 2009 compared with 11.4 in 2008). Previous crises have shown that in economic downturns people delay having babies (e.g., the Great Depression of the 1930’s in USA; 1970 oil crisis in USA). The data shows that crude birth rates have decreased in the EU 27 countries and in the European Area (EA16). Overall, net population growth is so low, only 0.1% in 2009, which is lower than in 2008.

The crisis is thus having an impact on the future demographics of the European Union. If the crisis continues, it may speed up even more the projected future population decline due to both low birth rates of European citizens and less net immigration. European countries need to look at the long-term challenge of population aging and devise policies that include migration. Immigration will not solve the problem alone but it will give more choices.

Authors

Sonia Plaza

Senior Economist, Trade and Competitiveness Global Practice, World Bank

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