Acknowledging needs

A first step to a more flexible regulation of migration flows is for policy makers to acknowledge that their economies need immigration. As underlined in Chapter 1, the demand for foreign labour may increase as the demographic imbalance in OECD countries widens. Even though the global economic crisis contributed to significantly reducing migration flows in 2009 (OECD, 2011b), demand is likely to increase during the recovery, mainly in sectors that traditionally suffer from labour shortages, such as agriculture, catering and construction.

In many OECD countries, labour demand exceeds the supply in a growing number of sectors, thus leading to temporary or permanent shortages. Besides problems of sectoral human capital allocation, labour shortages are partly due to the ageing of the population, which implies a fall in the share of the economically active in the total population, but also an increasing demand in the care sector. Figure 5.2 illustrates the ageing population trend in OECD countries.

Figure 5.2. Population structure by age groups in OECD countries

Notes: Figures with % show the change in each age group.

Source: Authors' calculations based on United Nations, World Population Prospects - 2010 Revision.

More importantly, the aggregate demand for workers is bound to rise as population ageing begins to deeply affect labour markets and social protection systems. The arrival of relatively younger workers contributes both to the renewal of the economically active population and to the financing of social protection and pension systems (Chojnicki and Ragot, 2011). In such a context, OECD countries will not only need high-skilled but also low-skilled immigrants.

Although part of the demand may be satisfied through temporary labour movements, economies require long-term immigrants too, particularly in the sectors where disequilibria may become structural, such as the health and care sectors. In this respect, the growing competition for talent not only concerns OECD countries but also emerging economies, especially in fast-growing Asia (OECD, 2011a and 2011b).

Despite the growing demand, most political leaders assume a defensive position on migration issues. Their role should rather be to communicate, through awareness campaigns for instance, the positive contribution of immigration to the economy and society. Indeed, "the planned reforms of migration policies need to involve a radical effort to enhance public knowledge and understanding of migration" rather than trying to "exploit this issue for political ends" (OECD, 2010).

Acknowledging needs does not mean overshadowing the potential costs of immigration. Low-skilled workers may feel particularly affected by the competition in the labour market generated by immigration, and problems of integration can easily spread throughout society if not tackled in time. But this is precisely why governments in host societies need to rethink their strategies, starting with fostering migration circularity.

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