Migration Flows Make The World Go Round

By Jaya Ramachandran

The 27-nation European Union is one of the main catalysts for international economic exchanges, including migration. Its prospects of growth and employment have a direct bearing on global migration flows. What is happening in Europe today is therefore one determining factor for international migration flows in the coming years.

In fact, as OECD Secretary General Angel Gurría says, labour market developments and migration flows are closely linked. “The decline in labour demand has been the driving force behind the fall in migration during the crisis, not restrictions imposed by migration policies, as our 2012 International Migration Outlook shows,” he said presenting the report in Brussels on June 27.

“Countries should therefore pay more attention to their long-term labour market needs, focus on skills and devise policies for the integration of migrants, particularly the young, whose competencies will be needed as the global economy recovers,” he added.

The OECD report finds that the global financial and economic crisis and the subsequent Great Recession had a tremendously negative impact on employment globally. Migrants, along with youth, were particularly affected by the global jobs contraction – and even more so young migrants. The impact was so strong, that migration flows into OECD countries experienced important declines during 2008 and 2009.

In 2010, migration inflows declined again, for a third year in a row. However, as the recovery started gaining momentum in several OECD countries, this decline was modest (of around -3% compared to 2009) and the number of migrants in the 23 OECD countries measured (plus Russia) totalled just over 4.1 million, a higher number than in any year prior to 2005. The preliminary figures for 2011 show that immigration flows started to increase again in 2011 in several OECD countries.” We will have to see if this trend holds, given the new bout of economic weakness,” said Gurría.

Interestingly, these new increases are not related to the particularly hard times that some Southern European countries are going through. In fact, emigration from countries like Greece, Italy, Portugal and Spain increased only very modestly.

Free mobility of labour

A second key message of the study, said Gurria, is that free mobility of labour enhances its adaptability to changing labour market conditions.

“Take the case of Europe. Free mobility within the region accounted for much of the overall decline in immigration inflows since 2007, almost half a million. Still, free mobility continues to account for almost 40% of migration flows into the European OECD countries,” the OECD head pointed out.

This issue of free mobility and its broader implications for the labour market is at the heart of another OECD publication on migration released on June 27: ‘Free Movement of Workers and Labour Market Adjustment – Recent Experiences from OECD countries and the European Union’. This study shows how free mobility favours the labour markets adaptability to changing conditions or downturns, and portrays it as a great advantage.

Referring to the salient features of the ‘2012 International Migration Outlook’, Gurria said. the decline in intra-EU migration flows in the post-crisis period has not been driven by policy restrictions, but rather the decline in demand for labour. “This important lesson is reflected in the experience of countries like Sweden, which fully opened up its labour market for migration in 2008 but did not experience a strong increase in labour immigration. This should make us think twice before we consider closing the doors to immigration as an adequate answer to unemployment.”

Demographic change

Another determinant factor for migration policies is the demographic change, said Gurria. “It is highly important to gauge the implications of the current crisis on migration flows and to review our policies under this challenging dynamic. But it is also crucial that we take into account longer term trends, like the demographic transformations in our societies. And this is not just a question of how many new workers there are to replace those who retire. As the 2012 International Migration Outlook reflects, labour markets are changing too rapidly to consider demographic imbalances alone as a reliable indicator of future occupational needs.”

The report projects that by 2015, immigration – at the current level – will not be sufficient to maintain the working age population in many OECD countries, especially in the EU. But the coming labour and skills shortages are not a simple function of demographic imbalances, they also depend on the changing nature of demand for particular skills and the extent to which they can be filled from existing sources of supply.

“The links between occupational growth and decline, demographic imbalances and the need for immigrant workers are therefore far from obvious,” noted Gurria.

Over the past decade, new immigrants represented 15% of entries into strongly-growing occupations in Europe, and 22% in the United States. They are thus playing a significant role in responding to labour demand in the most dynamic sectors of the economy. Many jobs which migrants are entering are new jobs, while many jobs from which older workers are retiring are being cut.

But even in occupations where overall employment is declining, there is still recruitment. New immigrants account for around 25% of new entries in these occupations in Europe and the United States, as these jobs are often less attractive to native workers. In other words, labour migration is not so much about replacing retiring workers, but about satisfying the changing needs of the labour market.

According to Gurria, one particularly interesting trend analysed in the latest International Migration Outlook is the changing role of Asia in international migration:

Migration dynamics in, from and to Asia are becoming more and more important for OECD countries. Asia’s share in migration flows to OECD countries has grown impressively: In 2010, Asia has been the leading source region of new migration and accounted for 35% of all immigration flows. This represents more than 1.8 million persons, an increase of 56% over 2000.

According to the report, the share of migrants from Asia among immigrants to OECD countries rose from 27% in 2000 to 31% in 2010, with China alone accounting for about 10%. China and India between them also account for 25% of international students in OECD countries. In the long-term, as Asia develops and offers more attractive jobs locally and itself attracts more skilled workers from abroad, OECD countries will be less able to rely on this steady stream of skilled workers.

“So if OECD countries want to rely on a steady stream of skilled workers from Asia in the future, they must take steps to maintain or rather improve their attractiveness as a destination for Asian skilled workers and students,” averred Gurria.