Moving to the Heart of Europe

Migration tends to be greater where there is a wider gulf between employment and economic opportunities

by Wendell Cox

Europe's demographic dilemma is well known. Like East Asia and to a lesser degree most of the Western Hemisphere, Europe's birth rates have fallen so far that the population is becoming unable to replenish itself. At the same time, longer  life spans have undermined the poulation’s ability to withstand a growing  old age dependency ratio, challenging the financial ability (and perhaps even willingness) of a smaller relative workforce in the decades to come. The EU-27 (excluding Croatia) over 65 population is projected by Eurostatto increase 75 percent relative to its working age population (15-64) between 2015 and 2050, more than either the 60 percent increase the UN projects in the United States and Japan (though Japan’s current ratio is much higher than the EU or the US).

This problem could be partially addressed by international migration, which could increase the size of labor force required to support expensive social welfare commitments. Our analysis of available Eurostat data (European Commission) data indicates that international migration to the European Union (EU) is strong. Further, migration has been shifting with the changing economic fortunes of EU nations, led by strong growth in the “heart of Europe” but slowing growth along much of the periphery of the former EU-15.This suggests that strong economic growth may be the key to solving, or at least ameliorating,  Europe’s looming demographic crisis.

All EU-15 Nations have Attracted Migrants

Since the 2004 enlargement of the European Union, now at 28, with the recent addition of Croatia, the former EU-15 has attracted millions of international migrants, including many from the newer entrants to the original fifteen memnbers. Eurostat data indicates that nearly 11 million people more people moved to these nations between 2005 and 2012 than moved away.

The changes are stunning. All 15 nations have had net international migration gains since 2005. The leader is Italy, which has added a net 2.8 million international migrants, the equivalent of 4.7 percent of its population. This is more than Italy’s total population gain between 1975 and 2000. Spain has added 2.6 million net international migrants, the equivalent of 5.6 percent of its population. The United Kingdom added 2.0 million international migrants, the equivalent of 3.2 percent of its population.  

Deep in the Heart of Europe

Perhaps most surprising are that gains the heart of Europe, six nations that established the European Coal and Steel Community in the early 1950s, which was to become today's European Union (Belgium, France, Germany, Luxembourg, Italy, and the Netherlands) (Figure 1).

Germany and France had net international migration of 885,000 and 625,000 respectively. In both countries this was equal to one percent of the population. However, Belgium had the largest relative addition of international migrants. Its 490,000 net increase was equal to four percent of its population.

Overall, the six founding nations of the European Union attracted a net 5.0 million international migrants 2005 to 2012. This is more than the population of all urban areas in the six nations except for Paris, Milan and the Rhine-Ruhr.

Five additional economies, the United Kingdom, Austria, Sweden, Denmark and Finland added a net 2.8 million international migrants. Even Portugal, Ireland, Greece and Spain, despite their fragile economies, posted substantial gains, adding 2.8 net international migrants (Figure 2).

The PIIGS Minus Italy

Five nations have been designated the PIIGS by the international financial community, due to their financial reverses. These include Portugal, Ireland, Italy, Greece and Spain. All, except Italy, have seen their international migration rates fall precipitously. Between 2005 and 2011, these four nations combined added an average of 450,000 net international migrants. By 2012, they lost more than 275,000 net international migrants. In contrast, Italy, one of the EU founders, continued its strong trend, adding approximately 365,000 net international migrants in 2012, up from its 2005 to 2011 average of 350,000.

The six founding members picked up some of the “PIIGS minus Italy” losses. In 2012, these nations added nearly 885,000 net international migrants, which is well above their 585,000 average for 2005 to 2011. The other five nations (United Kingdom, Austria, Sweden, Denmark and Finland) fell to a 275,000 net international migration gain in 2012, compared to their 2005-2011 average of 370,000.

The new 13 members did much better than before, losing only 5,000 net international migrants in 2012. Their average from 2005 to 2011 was a 150,000 loss (Figure 3).

Ireland and Spain

Spain and Ireland illustrate the connection between declining economies and declining international migration.

The Irish Times noted in a recent article that the latest data from the European commission indicates that Ireland now has the worst net international outmigration rate in the European Union. Just six years ago, the Times reports, Ireland’s net international in migration rate was the highest in Europe. Over the past four years (Figure 4), Ireland has lost approximately 35,000 net international migrants annually (Ireland’s housing bubble and the resulting national financial crisis are described in Urban Containment and the Housing Bubble in Ireland).

Spain's decline in net international migration has been every bit as spectacular. At its peak, Spain was attracting a net international migration approaching 800,000. Last year, Spain lost 165,000 international migrants (Figure 5).

The 13 New Members

The net international migration gains in Europe’s heart have not been good news for Eastern Europe, where the newer European Union members are located. Overall, these nations lost approximately 1,050,000 international migrants between 2005 and 2012, though as noted above, the loss was minimal in 2012. This more recent improvement may be the result of weak economic conditions in many western and southern European countries.

Romania and Lithuania were the biggest losers. Romania lost nearly a net 1,000,000 international migrants, equal to nearly five percent of its population. Lithuania did even more poorly, losing 300,000 international migrants, nearly 10 percent of its population. Both nations lost overall population.

Migration and Economic Growth

Despite the resurgence of growth (?) in the heart of Europe, the financial crisis has taken a toll. As in the United States, migration has fallen significantly, as many of the economic opportunities have dried up. By 2012, the net international migration to the EU-15 had been reduced to 900,000 from approximately 2 million in 2007. As throughout history, the demand for international migration is driven principally by the aspirations for a better quality of life. As a result, migration will tend to be greater where there is a wider gulf between the employment and economic opportunities in receiving countries than in countries that lose migrants.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.