Welcoming hands

OECD Observer

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Can immigration help solve the effects of the projected long-term decline in the labour force of OECD countries?

Labour immigration forms the bulk of migration flows in southern Europe. In Spain, the number of foreigners tripled in 10 years, and that does not include the number of naturalisations, which increased sharply over the same period. In Italy and Portugal, the foreign population doubled. In Belgium, France, the Netherlands and Sweden, the size of foreign populations fell, as the high rate of naturalisations in these countries offset higher inflows.

But how well are foreigners and immigrants integrated into the labour market? Generally speaking, less well than nationals, and in Denmark and the Netherlands, for instance, foreigners are often at greater risk of being unemployed.

While ageing will lead to higher dependency in the OECD, importing labour from abroad might not be the only solution. Many immigrants have difficulty finding proper work or holding down long-term jobs, and can end up depending on social security themselves. Also, ageing and lower birth rates affect these populations too. On the other hand, immigrant labour can be competitive, particularly in skilled sectors, such as medical services, though this type of immigration can lead to skill shortage problems in poorer countries of origin.

©OECD Observer No 248, March 2005

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