Why Migrants Shouldn't Be Rejected
ITALY, GREECE AND SPAIN ARE THE ONLY ROUTES TO EU COUNTRIES WITH BETTER LABOR MARKETS. YET THERE ARE MANY REASONS WHY WE SHOULD ATTRACT NEW WORKERSby Vincenzo Galasso, Dept. of Policy Analysis and Public Management, Bocconi
Translated by Alex Foti
Refugees from Africa and the Middle East are not trying to escape from hunger and poverty, but from wars and persecution. The humanitarian consequences are clear and are regulated by the Geneva Convention of 1951.
Although the motivation pushing migrants to leave their country of origin is not primarily economic, the choice of the destination country, the one in which to apply for asylum, is partly so. In order to rebuild their lives, it is important for refugees to have a social network supporting them in the host country. This is normally constituted by people of the same nationality already in the country, but most especially by the existence of economic opportunities-
UN data on Syrian refugees show us that their choice falls mainly on Germany (almost 100,000 out of the 350,000 who have applied for political asylum in Europe between April 2011 and July 2015), Sweden, and in general the countries of the Northern and Eastern Europe. Asylum requests to the countries of first entry are limited: little more than 2,000 in Italy, 3,500 in Greece, 5,500 in Spain. Evidently Syrian refugees are not placing great confidence in the potential of the labor market in Southern Europe.
The debate on whether accepting the inflow of refugees is steeped in economics. In addition to security concerns related to the fear that terrorists could be hiding among the refugees, economic uncertainty and social anxiety have generated negative reactions against migrants. Two major issues occupy the minds of natives: refugees can outcompete existing workers in domestic labor markets, and drain resources from already overstretched welfare systems at the expense of citizens in host countries. This latter aspect has emerged with a vengeance in an ad that the Danish government placed in four Lebanese newspapers in September, in order to let prospective asylum-seekers now that aid to refugees would be cut by 50%.
There is however also a more positive view on the economic effects of the arrival of refugees, and more generally migrants. The starting point in this case is the consideration that for decades European countries have had low fertility rates (around 1.5 children per woman in Mediterranean countries), a trend which is associated with increased longevity, and thus aging, of the population.
In the coming decades, the younger cohorts of the population (the most active sections of the labor force, who pay for the bulk of social security contributions to finance welfare systems) will shrink in comparison with the past. In this perspective, the flow of typically young refugees and migrants can offset, as it has happened in recent years, Europe’s negative demographic trends. This aspect will be relevant for the labor market, where already today migrants are working in jobs spurned by the Italians.
For welfare systems, the arrival of migrants and refugees who regularly participate in the labor market and contribute to the financing of welfare can be an important source of liquidity for recipient countries. However, the contributions paid are made (as it should be) in exchange for current and future welfare benefits. In the case of social security, contributions are paid to be collected after retirement. Therefore, payments made today by migrants increase the liquidity of the system and help pay current pensions, but carry an implicit debt, in the form of future pensions the welfare system will have to pay. However, in the past migrants have proved net lenders to European welfare states. It’s the case of migrants who, having worked and contributed to the social security systems in Europe, decide to return to their countries of origin. Absent international agreements between social security systems of immigration and emigration countries, many of these migrants did not get a pension, despite the contributions they paid. Clearly, this is an unfair situation that European countries should seek to redress.
