Why immigration will not solve the falling birth rate crisis

As the competition for migrants increases, immigration cannot solve the problem of fertility below replacement levels.

Introduction

Over the past half century, mass immigration at historically unprecedented scales has transformed many developed countries. From the United States to Western Europe and wealthy Asia-Pacific nations like Australia, large immigrant communities have become an integral part of both the population makeup and labour markets.

This mass migration is primarily driven by major global demographic shifts – chiefly the significant population growth occurring in lower income countries at the same time as population decline sets in within more developed nations due to sub-replacement fertility. With birth rates in almost all advanced economies now far below replacement levels, immigration is increasingly viewed by many as an indispensable tool to offset domestic population loss and workforce aging. But is large-scale immigration truly a viable permanent solution to low birth rates in rich countries? This in-depth analysis aims to explore the complex interplay between demographics, immigration and the economy in aging developed societies.

The Demographic Transition and Emergence of Global Population Imbalances

Contemporary patterns of mass migration are inextricably linked to the demographic transition which has unfolded across the globe over the past two centuries. To understand why immigration flows look the way they do today, we must first comprehend how the demographic transition has radically reshaped population structures in both developing and developed regions.

Pre-Transition Population Dynamics

For almost all of human history until the mid-18th century, population dynamics were characterized by both high birth rates and high death rates. In pre-industrial agricultural societies, women tended to give birth to between 5-8 children on average over their lifetimes. However, due to very high infant and child mortality rates, often only 2-3 children survived to adulthood and had children themselves.

This pattern of high fertility and high mortality kept population growth low. Famines, wars and plagues could easily wipe out population gains over generations. Life expectancy fluctuated but was often around 30-40 years. Populations were stable and in equilibrium – demographic sustainability through tragic limitation.

The Mortality Revolution

This longstanding population equilibrium began to shift in Northwestern Europe from the mid-1700s. In countries like England and the Netherlands, infant mortality rates started to gradually decline thanks to improvements in medical knowledge, public hygiene, sanitation infrastructure and nutrition.

Fewer babies and children now perished to infectious diseases like smallpox, measles and cholera. However, birth rates still remained high, with most women continuing to give birth to 5-8 children over a lifetime based on established societal norms. This combination of persistent high fertility but substantially lower child mortality sparked population growth, as more children survived to adulthood and had large families themselves.

Over the next century and a half, accelerating innovations and dissemination of public health interventions caused infant and child mortality to plummet further in Northwestern Europe and populations expanded rapidly as a result. The population of England nearly tripled from 1750 to 1850. This phenomenon spread across Europe and European settler colonies like the United States and Canada throughout the 19th century.

Developing better medical treatments and improving sanitary conditions had overturned millennia of population equilibrium – but further revolution was yet to come.

Fertility Decline and Demographic Dividend

The next phase of the demographic transition saw fertility rates fall from their historical highs down towards replacement level alongside the prior mortality revolution. As countries industrialized and urbanized, traditional rural agricultural lifestyles were upended. Whereas large families were economically beneficial in agrarian society, children became costlier for city-dwelling factory workers and white-collar professionals.

Female education and workforce participation also tended to reduce fertility, as having ongoing pregnancies became more disruptive. Cultural and religious norms promoting high fertility gradually shifted too.

This fertility decline towards near replacement-level birth rates took place over decades rather than years, with older generations still having large families according to long-established customs. But by the mid-20th century, average fertility in developed countries stabilized around 2 children per woman – far below historical averages of 6 or more children per woman just a century prior.

Rapidly declining child mortality followed by substantial reductions in fertility over the span of a century fundamentally altered population structures. Falling mortality followed by falling fertility created a “demographic dividend” – an unprecedentedly large working-age population with far fewer dependent children and elderly than ever before in history.

For countries that underwent this transition early like Britain and Germany, this dividend underpinned economic growth and geopolitical dominance during the 19th and early 20th centuries. Their populations tripled or even quintupled as they enjoyed the fruits of mortality and fertility declines.

Global Diffusion of the Demographic Transition

The demographic transition commenced in Northwestern Europe but gradually diffused outwards to other parts of the globe over the next two centuries. Societies across the planet underwent the transition’s mortality and fertility declines at very different times.

Those societies entering the transition earlier completed the process by today and saw their populations stabilize or begin shrinking due to fertility falling below death rates. Regions entering the transition later are still experiencing rapid population growth as their mortality revolution spreads but the behavioral and cultural shifts behind fertility decline take longer.

Significantly, improvements in health technology enabled later developing regions to attain far lower infant and child mortality rates than European countries had at similar stages of development and income. In the mid-19th century, 15-20% of British children perished in their first 5 years of life. Today, this child mortality rate is achieved by Sub-Saharan African societies with per capita incomes below $1000.

This helps explain why regions entering the demographic transition later have undergone even more massive population expansions. While Britain’s population quadrupled during its transition between 1750-1950, Nigeria’s population grew almost 15-fold during a similar 200 year period. Overall, Sub-Saharan Africa’s population grew more than 5-fold between 1950 and 2022.

Rapidly developing countries in South Asia, Southeast Asia, Latin America, the Middle East and North Africa also saw their populations grow 3-5 fold over the past 70 years due to belated demographic transitions.

Emergence of Global Demographic Imbalances

The global diffusion of the demographic transition at varying times and paces has given rise to stark differences in population structure and growth trajectories between the developed and developing worlds:

– Most developed countries completed demographic transition by the mid to late 20th century and now have slowly growing or outright shrinking populations due to sub-replacement fertility. Populations are aging rapidly with median ages rising into the 40-45 range.

– Many developing regions are still undergoing demographic transition and experiencing rapid population growth due to past declines in child mortality coupled with lingering high fertility. Their populations have very youthful structures with median ages in the teens to mid-20s range.

This situation where wealthy countries have shrinking aging populations while poorer regions undergo massive population booms sets the scene for the modern era of mass migration. The economic incentives for large-scale movement from developing to developed countries are clear and growing stronger over time as demographic gaps widen further.

Before analyzing contemporary migration flows and their economic impact, it is worth exploring why attitudes to immigration in receiving countries underwent a major liberalizing shift in the decades after World War 2.

The Post-WW2 Shift in Attitudes Towards Immigration in Developed Countries

During the first major era of globalization from the mid-19th to early 20th century, migration within Europe and from Europe to settler societies like the United States, Canada, Australia and New Zealand was common. But whether voluntary or forced, these flows were seen as settlers colonizing lands perceived as empty or underutilized rather than “immigration” to populated nation states.

Attitudes towards immigration as we conceptualize it today really coalesced in the early 20th century as ideas of the nation state matured. From the 1900s to the 1940s, public attitudes and government policies in most developed countries were decidedly anti-immigration. The United States imposed strict racially defined immigration quotas in the 1920s. Even European countries were generally opposed to immigration from elsewhere in Europe, never mind further afield.

But views gradually shifted in the decades after 1945 due to a mix of economic necessity, post-colonial guilt and genuine open mindedness. This allowed the modern onrush of immigration to rich countries to accelerate.

Post-WW2 Labour Shortages

The massive destruction and loss of life during the Second World War left many combatant countries with severe labour shortages just as they embarked on national rebuilding and economic revitalization. Combined with the immediate post-war baby boom, this created a huge demand for workers that could not be met domestically.

Countries like Britain, France, Germany, Belgium and the Netherlands turned to immigration from former colonies to help fill this gap. Over a million Algerians settled in France from 1945-1965 for instance. The United States lifted racially restrictive immigration laws to allow more immigration from Asia and Latin America. Hundreds of thousands of Turkish guest workers helped rebuild West Germany after the war.

For around 2-3 decades after 1945, governments and publics generally viewed this labour immigration as a temporary necessity to aid postwar reconstruction – not as a permanent transformation of their societies through diversity. But as economic dependence on these migrant worker communities grew, return became less likely.

Anti-Racism and Diversity

Alongside labour needs, the anti-racism movement that gathered steam from the 1950s onwards made overt expressions of xenophobia towards immigrants increasingly taboo. Civil rights struggles made discrimination based on race, ethnicity or country of origin seem backwards.

Within elite cultural circles, this morphed into glorification of diversity as an ethical good in itself regardless of economic considerations. Multiculturalism, positive racial discrimination and relaxed immigration policies became markers of enlightened progressivism.

Demographic Need for Immigration

Mass immigration continued and even accelerated after the initial postwar labour shortages ended because fertility decline left Western countries facing shrinking workforces and aging populations.

Just as domestic fertility fell below replacement levels from the late 1960s and 1970s, developing countries were experiencing massive population booms due to belated mortality transitions discussed earlier. This supplied huge numbers of young working-age people in regions like North Africa, the Middle East and South Asia looking for economic opportunities abroad.

Rather than grapple with the underlying demographic challenge of sub-replacement fertility, immigration became seen as a quick fix that enabled continued growth without social upheaval. More diverse societies were also increasingly seen as intrinsically positive.

This combination of labour needs, anti-racism and demographic pressures drove a sweeping liberalization of attitudes towards mass immigration in the developed world over the postwar decades. With expanded public tolerance as cover, policymakers pursued more open immigration policies to drive economic growth.

But does rising dependence on immigration to sustain economic expansion and counter aging populations make long-term sense for advanced economies?

The Economic Reliance on Immigration in Aging Developed Countries

While some ideologically driven open borders proponents support massive immigration on principle regardless of economic impact, mainstream defenders of high immigration point to its supposed economic benefits. Let us dispassionately examine the purported economic upsides of large migrant influxes as well as the long-term demographic challenges mass immigration creates or obscures.

Do Immigrants Boost GDP Growth?

The most common argument made by the pro-immigration economic establishment is that influxes of working-age immigrants expand the labour force, which expands overall economic output and GDP growth.

With domestic fertility below replacement level, native workforces are aging and shrinking in most advanced economies. Immigration helps counteract this by adding younger workers not subject to the population momentum of sub-replacement fertility driving domestic demographic decline.

However, recent research increasingly calls into question the extent to which immigration actually boosts GDP per capita versus simply expanding aggregate GDP via bigger populations. After analysis of two decades of data from 22 OECD countries, researchers found little impact of immigration on per capita economic growth or incomes.

This suggests the primary benefit is increased tax revenues, profits and overall economic output enjoyed by elites and corporations from having more people and workers – not prosperity for average citizens.

Do Immigrants Boost Innovation?

Another argument is that an influx of diverse talent from abroad makes countries more dynamic and innovative. Silicon Valley provides strong anecdotal evidence of immigrant entrepreneurs like Elon Musk or Sergey Brin driving technological innovation in America.

However, high-skilled immigrants tend to cluster in enclaves like Silicon Valley rather than dispersing across the broader economy. Overall, immigrants are usually overrepresented at both ends of the skills spectrum – in elite knowledge economy jobs but also low-skill manual labour. The economic benefits of highly educated immigrants primarily accrue to large urban hubs rather than nationwide.

Do Immigrants Support Aging Societies?

The most salient economic rationale for immigration to developed countries is bolstering aged care and social services in top-heavy populations with swelling retiree cohorts and relatively fewer working-age people to support them. Immigration helps correct this imbalance.

Young immigrants largely concentrate in the 20-45 age bracket strongly represented in the labour force. They pay taxes to support rising health and pension costs in aging populations they join but make fewer claims on these services themselves initially.

However, immigrants also grow old. After working and paying taxes for 35-40 years, migrant workers will qualify for the same pensions and aged care benefits as native-born retirees. Failure to account for immigrants’ future old-age costs makes immigration appear like a bigger fiscal boon than it truly is.

Do Native Workers Benefit?

Although large influxes of immigrants undoubtedly benefit overall GDP on paper, the economic effects for incumbent native workers are more mixed. Immigrants compete with natives in specific sectors like trades and services rather than the whole economy. This can depress wages and reduce job options for both low and middle skill native workers.

Careful targeting of immigration towards genuine skills shortages is important to minimise negative effects on native workers. Current policies focused on overall numbers often overlook structural mismatches. An oversupply of low-skill migrants does little good if there are shortages of doctors, nurses and technicians.

Economic Impacts: Summary

In summary, current high levels of immigration:

– Support overall GDP growth via increased population and labour supply

– Modestly benefit corporate profits and government budgets. But gains are limited per capita.

– Provide some skilled talent for knowledge industries. But too narrow to transform whole economies.

– Help address aging society challenges if migrants stay employed. But long-term fiscal boost exaggerated.

– Risk harming wages and job prospects for many native workers if numbers are not carefully calibrated to skills gaps.

The economic upsides of mass immigration are positive but relatively narrow in scope. But perhaps more importantly, large migrant influxes do little to address the root causes of population aging and shrinking workforces in advanced economies.

Why Immigration Only Delays Rather Than Solves Population Decline

Given most developed countries now endure sub-replacement fertility, immigration cannot reverse national population aging and decline indefinitely without even greater migrant influxes over time. At best, it buys time by filling short-term human resource gaps. The underlying demographic challenge still remains unsolved.

The Temporary Demographic Fix

Immigration acts as a temporary fix for aging developed societies by injecting mostly working-age labour. This tops up the workforce and broadens the tax base. But immigrant populations exhibit the same sub-replacement fertility trends as host countries after a generation or two.

The key statistic is the total fertility rate (TFR) – the average number of children each woman has over her lifetime. The minimum TFR to naturally replace deaths with new births is around 2.1 children per woman in advanced economies.

East Asian and Southern European countries have very low TFRs of 1.2-1.4. Northern and Western Europe average 1.6-1.9. The white American TFR is 1.7 while Hispanic immigrants are at 2.0. Canadian, Australian and New Zealand fertility rates range between 1.5 and 1.8.

These below replacement TFRs mean that after the postwar baby boom echo generations fade, populations will decline without immigration. For example, America’s TFR has been between 1.7-2.1 for decades. Immigration is the sole reason its population keeps growing overall despite sub-replacement fertility rates.

But what happens to immigrants after a generation or two? Every immigrant group that has lived in America for an extended period now exhibits similar TFRs to native-born Americans, from 19th century Irish Catholics to early 20th century Jews and Italians.

More recent arrivals like Mexicans, Chinese and Indians display higher initial fertility. But just like prior immigrant groups, their TFRs decline over time and converge with wider societal norms around family size.

This pattern repeats worldwide. Once immersed in advanced post-industrial societies, immigrants do not keep reproducing above the native fertility rate indefinitely. They become subject to the same cultural values and economic constraints that limit family size, from women’s education and employment to housing costs.

Without ongoing mass arrival of new immigrants, immigrant-origin populations exhibit sub-replacement fertility just like the incumbent population after a couple of generations. Immigration offers temporary respite from declining workforces but does not resolve the underlying lack of births driving it. It merely buys time.

Ever Increasing Dependency on Immigration

The developed world has enjoyed a ‘sweet spot’ period for immigration since the 1990s. Fertility decline left countries needing more workers. Meanwhile developing regions still had high birth rates and young populations eager to migrate. This allowed a win-win situation of population stabilization via immigration.

However, developing regions are now moving through the demographic transition themselves with sharply slowing population growth as their fertility rates fall. United Nations population forecasts show peak population being reached within decades in East Asia, South Asia, Latin America, North Africa and the Middle East as a whole.

Sub-Saharan Africa will be the main remaining high fertility zone. But with low education levels and skills, it cannot fill substantial labour gaps in knowledge economies. Plus, China and now Russia are looking to Sub-Saharan Africa and Central Asia to drive their own immigration programs as populations decline.

Therefore, the pool of potential new immigrants accessible to developed countries is set to shrink dramatically relative to population size over coming decades. But since fertility will likely remain sub-replacement, aging societies will need immigrant labour more than ever.

This means immigration flows would have to expand continuously to fill ever larger labour force gaps, as each immigrant cohort goes through the same fertility transitions. Rather than a temporary supplement to stabilize aging societies, mass immigration becomes a cycle of endless, exponentially growing dependency with increasingly scarce inputs.

Ponzi Demographics?

Hypothetically, if fertility remained below replacement then immigration would have to keep stepping up every generation for population stabilization.

Each generation of immigrants would be numerically smaller than the last as fertility declines. So more newcomers would always be needed to maintain a steady workforce and broad-based population pyramid.

Taken to its logical conclusion, ever rising immigration could hypothetically “Ponzi-fy” the population structures of developed countries. The working-age population could be constantly replenished