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– - +31 20 525 1630 Mind the gap! General effects of ageing on labour supply and the possible role of labour migration Skillsnet.

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Presentation on theme: "– - +31 20 525 1630 Mind the gap! General effects of ageing on labour supply and the possible role of labour migration Skillsnet."— Presentation transcript:

1 – Mind the gap! General effects of ageing on labour supply and the possible role of labour migration Skillsnet conference, Cedefop Thessaloniki, 21/22 feb Ernest Berkhout

2 Contents  European trends  ageing population  migrating labour  Consequences for the labour market  potential ‘employment gap’  who suffers?  what can be done?  Possible role of migration  public misconceptions on ‘migration’  labour migration & skills

3 Ageing  Four projections Eurostat,  baseline projection  low growth  high growth  no migration  based on  fertility rate, death rate  migration rate

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5 jongeren

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9 Potential employment

10  ageing most pronounced in ‘no migration’ scenario  migrants are relatively young

11 Employment gap  gap = [demand for labour – supply of labour]  demand  total population  constant  supply  working age population  decling Assumptions:  constant labour productivity  constant demand (per capita)  constant inactivity rate  migration along Eurostat projections  migrant supply fits demanded type of labour exactly

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13 Employment gap (pure ageing effect) supplydemanddifferenceto close the gap Population (x1000) 453,831 Working age rate 67.2% Potential employment (x1000) 305,076 Employment rate 63.6% Real employment (x1000) 194,028

14 Employment gap (pure ageing effect) supplydemanddifferenceto close the gap Population (x1000) 453,831constant Working age rate 67.2%56.7% Potential employment (x1000) 305,076257,144 Employment rate 63.6% Real employment (x1000) 194,028163,543

15 Employment gap (pure ageing effect) supplydemanddifferenceto close the gap Population (x1000) 453,831constant Working age rate 67.2%56.7% Potential employment (x1000) 305,076257,144 Employment rate 63.6% Real employment (x1000) 194,028163,543194,028

16 Employment gap (pure ageing effect) supplydemanddifferenceto close the gap Population (x1000) 453,831constant Working age rate 67.2%56.7% Potential employment (x1000) 305,076257,144-48,208 Employment rate 63.6% Real employment (x1000) 194,028163,543194,028-30,485

17 Employment gap (pure ageing effect) supplydemanddifferenceto close the gap Population (x1000) 453,831constant Working age rate 67.2%56.7% Potential employment (x1000) 305,076257,144 Employment rate 63.6% 75.5% Real employment (x1000) 194,028163,543194,028-30,485194,028

18 Employment gap (projection) supplydemanddifferenceto close the gap Population (x1000) 453,831449, % Working age rate 67.2%56.7% Potential employment (x1000) 305,076254,878 Employment rate 63.6% 75.5% Real employment (x1000) 194,028162,102192,318-30,216192,318

19 Employment gap Employment gap (x1000 persons) Employment rate needed to close the gap Ageing effect only30, % Baseline growth30, % No migration scenario30, % Low growth25, % High growth36, %

20 But…  labour productivity will rise  considerable differences within EU25  closing employment gap ≠ solving all ageing problems!  rate 65+/65- still higher  financing pension schemes  higher demand for health & recreation  so: figures should only be treated as indicative!

21 Who suffers?  countries with older population… .. and low net migration  (because migrants are mostly 15-64)

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26 What can be done?  1. stimulate population growth  higher employment rate:  2. more people  3. more hours/week  4. stop working at higer age  5. ‘parttime-pensioner’ vs. all-or-nothing  6. labour productivity increase  7. outsourcing (production abroad)  8. (even more) immigration of labour (f.i. temporary) if all else fails: lower GDP per capita

27 The role of migration  Eurostat projection assumptions  positive in all EU-25 countries  relatively low in NMS  in NL about 30,000 per year  But what exactly is ‘migration’?

28 “Help, immigration rises!” …

29 … or not?

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31 so….  Immigration = structural inflow  Emigration = structural outflow  NET MIGRATION = resulting sum of both flows CBS: “Immigranten zijn personen die zich vanuit het buitenland in Nederland vestigen en in de Gemeentelijke Basisadministratie persoonsgegevens (GBA) zijn ingeschreven. Inschrijving in de GBA vindt plaats indien de verwachte verblijfsduur in Nederland in het halfjaar volgend op de vestiging ten minste vier maanden bedraagt. “ Dus exclusief de meeste seizoenmigranten!

32 Which countries of birth highest net inflow 2007?  Poland +6,770+5,330  Rumania & Bulgaria+5,  Germany +3,284+2,553  China +1,  MEE (excl. Poland)+1,  Former Soviet-Union +1,366  United Kingdom+1,360

33 Wich countries highest net outflow 2006?  Netherlands-35,800  Antilles/Aruba -1,200  Angola -1,100  Somalia -800  Surinam, Morocco, refugee countries, Spain, Turkey

34 Net migration: change of character

35 Immigrants & labour  on average:  higher unemployment  more temporary jobs  net migration 2004 was % of population  but rising considerably in Western Europe  bi-polar distribution (USA, Can, CH, NZ, France, Sweden)  two types of migrants?

36 Immigrants & skill groups Source: L. M. Kahn, ‘Immigration, skills and the labour market’’, Journal of Population Economics, 2004

37 Immigrants & skill groups Source: OECD (Database on immigrants & expatriates, 2005)

38 NMS migrant similar or hihger educated Source: OECD (Database on immigrants & expatriates, 2005)

39 Early experiences within EU migration  UK, IRL & Sweden no restrictions since May 1 st, 2004  age 20-40, high education level  working in lower job levels  inclined to return if no work  no rise in social security schemes  But what if economic downturn?  no empirical facts yet…

40 Foreign labour in practice…  language!  security (-)  customer contacts (-)  job motivation (+)  housing! (-)  cultural differences  adaptation (-)  creativity, ‘best of both worlds’ (+)  price (+)  family reunification (-)  young & high skilled in low skilled jobs (-/+)  seasonal peaks very important (+/-)

41 …and possible solutions  language  Swedish nurses: language course in Poland  housing  commitment tempwork agencies-communalities  fight illegal labour  cultural differences  …  price  will rise inevitably  family reunification  less likely then before, distances in EU small

42 – Mind the gap! General effects of ageing on labour supply and the possible role of labour migration Skillsnet conference, Cedefop Thessaloniki, 21/22 feb Ernest Berkhout


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