This blog is intended to go along with Population: An Introduction to Concepts and Issues, by John R. Weeks, published by Cengage Learning. The latest edition is the 13th (it will be out in January 2020), but this blog is meant to complement any edition of the book by showing the way in which demographic issues are regularly in the news.

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Thursday, February 23, 2017

Fewer Immigrants Because of Brexit Could be a Big Cost for the U.K.

This week's Economist surveys the potential cost to the economy of Britain of pulling out of the European Union and, in the process, lowering the level of net immigration. You will recall that at after the Brexit vote, polls indicated that keeping people out was a major motivation for voting in favor of Brexit, although that was a bigger issue for people who did not live in immigrant-prone areas than those who did, as I noted at the time. The Economist puts the actual immigration numbers in perspective:
Despite the continuing influx, net migration into Britain is hardly out of control, at least compared with other rich countries. On average annually it amounts to about three times the attendance at a Manchester United football match. Compared with their population, Ireland, Australia and Canada see far more new arrivals.
But British concern about immigration has little to do with raw numbers. Even in 1995, when net migration was well under 100,000, two-thirds of Britons wanted it cut. No reference to immigration appeared on the ballot paper, but politicians believe that the Brexit vote represented a desire to “take back control” of the country’s borders. Since then Mrs May and Amber Rudd, the home secretary, have repeated a long-standing commitment to cut annual net migration to the “tens of thousands”.
The story goes on to list the various ways in which lower rates of net immigration would wind up harming the British economy. Although she is not mentioned, the list is clearly reminiscent of the policy paper published by demographer Jane Falkingham of the University of Southampton prior to the Brexit vote. The Economist notes that a major issue is that the aging population of the U.K. is helped along by working age immigrants.
As it stands, the flow of people into and out of Britain tilts the numbers favourably, improving the dependency ratio. Britain exports old, creaky people and imports young, taxpaying ones. More than 100,000 British pensioners live it up in sunny Spain; meanwhile, up to 100,000 working-age Spaniards brave the British cold.
With low net migration, Britain’s elderly would be more burdensome. Workers would need to be taxed more heavily to pay for care for their elders. The government’s fiscal watchdog suggests that by the mid-2060s, with annual net migration of about 100,000, public debt would be roughly 30 percentage points higher than if that figure were 200,000. Taking back control comes with a whopping bill.
So, this is a classic case of "be careful what you ask for." Demographic change everywhere in the world--not just in the U.K.--also means that "you can't go home again" in the metaphoric sense. We all have to come to grips with that fact.

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