globalEDGE Blog - By Tag: immigration

In June 2016, Britain voted to end its 40-year membership in the European Union. On January 31, 2020, the controversial decision to leave the union went into effect. Since that decision, Britain has had conflicting economic results with higher inflation and lower GDP.

Many advanced economies are experiencing a shortage of labor. Wages are being driven up, sustaining inflation above central bank targets. Weakening labor markets, or wage pressure, is one of the reasons central banks intend to keep short-term interest rates at a higher level for a prolonged period. However, a potential solution to the labor shortage is migration.

The technology industry is made up of skilled workers from all over the world, and the success of this industry largely relies on the ability to share and develop different ideas. When countries enforce strict immigration laws, or prevent travel in and out of the country, it hinders the technology industry. This is pertinent considering the possible changes in immigration laws in the United States under the Trump administration which may include reducing visas, increasing deportation, and focusing efforts on what used to be considered sanctuary cities. Multiple technology companies have expressed complaints with these policies, including Microsoft, Amazon, Google, and Apple.

The world is going through a major demographic transition. Population growth is decreasing around the world, while the age distribution is leaning towards the elderly. But how would this alter any economy? Population growth plays a key role in every economy in the world, where a lower population growth rate means that there will be fewer workers and consumers. An aging population would lead to a smaller working-age population, which would decrease the growth of the labor force. Both of these trends result in lower GDP growth.

When experts study the economic effects of migration, the amount of money expatriates send back to their homes plays a key role in some countries. These transactions are commonly referred to as remittances, and they represent a major international financial resource in the world and a mean to reducing poverty in the developing world. Remittances also create positive spillover effects, such as improving health, education, and gender equality.

The world is facing its worst refugee crisis since World War II. According to the United Nations Refugee Agency (UNCR), there are 21.3 million refugees across the globe. A vast majority of these refugees come from Africa and the Middle East, with Syrians accounting for nearly one-fourth of the total refugee population. Many of these refugees are flocking to the nation of Turkey, which is currently playing host to 2.5 million refugees, nearly one million more than any other nation. These refugees flock to Turkey with the hope of eventually journeying to the developed economies of Europe.

With the world population more than doubling from 3.035 billion people in 1960 to today’s global population of approximately 7.347 billion, and with UN projections estimating a global population of 9.7 billion by 2050, there has been much rhetoric and concern over the social, environmental, and economic impact of this growth. Many of the fastest growing nations in the world have gone as far as implementing government policies and programs aimed at stemming this rapid growth, the most notable of which was the Chinese one-child policy, which was introduced in 1978 and began to be phased out only last year. While there is no questioning the legitimacy and seriousness of the issues caused by rapid population growth, there is also a myriad of other issues, equal in severity, that stem from the fact that the world population is not growing fast enough, particularly in developed nations. The focus of this article will be on the latter set of population growth issues, those which can be linked to the insufficient population growth.

Named after the town in Luxembourg where the agreement was signed, the Schengen Agreement allows for the dissolution of internal borders and implementation of passport-free movement within its member nations. After taking effect in 1995, the Schengen Area is currently comprised of 26 European nations of which 22 are also members of the European Union. The four non-EU members are Iceland, Norway, Switzerland, and Liechtenstein, while the only six EU members outside the Schengen zone are Bulgaria, Croatia, Cyprus, Ireland, Romania, and the United Kingdom. Since its implementation, the Schengen agreement has eased the flow of both goods and services across the area providing a major economic benefit to member economies with people making 1.3 billion crossings of the European Union’s internal borders annually, along with the crossing of 57 million trucks carrying approximately $3.7 trillion of goods. Naturally, this opening of borders has been instrumental in the growth of many industries across the Schengen zone, specifically tourism and transportation. However, after the recent terrorist attacks in France and Belgium, the Schengen Agreement, and all its associated economic benefits, could be in jeopardy.

Europe is in the midst of an immigration crisis of historic proportions. Since January of this year, the European Union (EU) has received an influx of an estimated 1 million asylum seekers, with the promise of many more to come. These refugees are fleeing conflict and persecution, much of which can be linked to the rise of insurgency, specifically the Islamic State, in the Middle East. Human rights violations by the oppressive regime in control of Eritrea are also a major cause for the influx of refugees. It is believed that approximately 60% of all immigrants are coming from Syria, Afghanistan, and Eritrea. Refugees select Europe as their destination due to the relatively close proximity and the economic prospects for a better life. While the European refugee crisis is first and foremost a humanitarian crisis, it will undoubtedly have a significant impact of the Eurozone economy, both now and for decades to come.

A faltering economy and civil unrest are turning away potential foreign investment in South Africa. The unemployment rate is at an 11 year high of 26.4% and the stagnating economy does not provide an optimistic outlook for this rate to drop. This bleak forecast is causing massive amounts of civil unrest in the form of violent protests all across the nation.

In recent years, immigration has been a topic that has been widely discussed globally, from the U.S. to the EU to the International Monetary Fund and the World Bank.  There are other aspects of immigration that are often not considered that tend to slip through the cracks of the political quagmire, and those aspects can influence the global economy and can be far-reaching.  One such aspect is remittance, which is the transfer of money from a worker in a foreign country back to individuals back in their home country, typically family members and friends.

In a world where overpopulation and high unemployment are serious problems for many nations, Germany faces an entirely different set of challenges. Germany currently has record low unemployment rates that are leading to a deficit of workers, especially those with high levels of education. To further magnify this issue, the current workforce is aging rapidly, and with the lowest birthrates in Europe, the size of the German workforce will decrease substantially in the coming decades. The most recent projections show that Germany’s working-age population will decrease by 6.3 million people by 2030, and that the entire population could decrease as much as 19%, to about 66 million people.

Spain's economic depression has changed many aspects of the country, one of them arguably including the abdication of its king, but recent reports have shown that the demographics of Spain's workforce have experienced a dramatic shift. Due to the lack of economic opportunities for Spain's youth, the cost of living, and high unemployment rate, many Spaniards have left the country. Spain experienced it's first population decline since 1971 in 2012, with statistics now stating that over 310,000 citizens have left the country since the end of 2012. In spite of this, five million foreigners have entered the country's workforce, mostly from Russia, China, and other Asian countries in search of bargains for valuable factory properties, water sources, and natural resources.

Parisian influence is growing in Asia as French citizens pour into Hong Kong looking for economic hotspots in luxury retail, commercial and residential real estate, and business services. Recently, World Economic Forum rated Hong Kong as the world’s most developed economy.  The country’s booming economy, coupled with Europe’s debt crisis, has significantly increased the rate at which French citizens are immigrating to Hong Kong.  Since 2006, the French community in Hong Kong has grown by more than 60%.  But Hong Kong is not the only country where Westerners are flocking; mainland China, Thailand, Singapore, and India have been expanding rapidly as their markets open up.

There are about 30 million overseas Chinese in total, and most reside in neighboring Asian countries. Indonesia and Thailand have the biggest numbers, with about 7-9 million each, while Singapore has the highest concentration of around 3 million, or 75% of its population. One such country that is reaping the benefits of immigration is Malaysia, but is Malaysia returning the favor?

Today, immigration is often regarded as an economic threat because jobs are believed to be stolen by immigrants. However, a recent study published by the National Bureau of Economic Research contradicts this popular bias. The results of the study indicate that immigration encourages business activity and produces more jobs for a country’s economy. You may be asking yourself: “How can immigrants competing with domestic labor for jobs, actually create more jobs?” There are several reasons which help answer this question.