What if migration were to end?
Migration is a core channel through which demographic forces shape an economy’s performance in the long run.
Our new Zero Migration scenario models the impact of removing all future migration flows from our baseline forecast, an extreme but useful counterfactual. Headline population effects are large but mechanical: destination economies, mostly advanced, see significant declines, while origin economies, mostly developing, see modest gains as retained labour is typically diluted across larger domestic populations. Labour supply and aggregate output fall in destination economies and rise in origin ones.
Output per worker declines across most destination economies because the productivity gains migration delivers, through knowledge transfer and improved labour market allocation, are lost.
The report highlights that public finances also deteriorate in destination economies in the absence of any offsetting policy response. Migrants tend to arrive at prime working age, so removing them lifts old-age dependency ratios and narrows the tax base just as age-related spending is rising. In the Eurozone, the dependency ratio rises by nearly 9ppts to near 60% by 2060 in our scenario.
Download the report for more detailed insights.
