Banking on migration only would require inflows of between 100 000 and 500 000 migrants per year in the four largest economies alone. How can labor input be maintained at today‘s level, despite shrinking workforces? Even if Germany increases its retirement age to 68 and makes efforts to increase the labor force participation rates of women, older workers and foreigners to the levels seen in Sweden, it will still need 200,000 migrants per year on average. But if it relied on immigration alone to mitigate the impacts of demographic change on the labor market, it would need 482,000 migrants per year. In such a scenario, the demand for labor migrants would be at similarly high levels in Italy and Spain, with a needed inflow of 414,000 and 338,000 migrants per year on average, respectively. However, Italy and Spain benefit from relatively higher internal reserves, given their lower labor force participation and employment rates compared to Germany. The same holds true for France, which additionally profits from a more favorable demographic development. With labor reforms to boost participation, Italy would need only 89,000 migrants per year, while in Spain this number would fall to 131,000. In France, increasing labor force participation rates would even be enough to keep the total number of hours worked stable in the long run, and an increase in productivity of +10% would have the same effect. Without these changes, relying on immigration alone would require 115,000 migrants per year.
Learn more here: https://www.allianz.com/en/economic_research/insights/publications/specials_fmo/2024_02_14_European-Labour-Markets.html
