Europe’s pension problems are worse than I had thought

Immigration can help offset some of the side-effects of an ageing population in Europe but would be nowhere near sufficient to salvage struggling pension schemes, the United Nations said on Monday.

The UN’s 2004 world economic and social survey said even with immigration projected to average 600,000 a year between 2000 and 2050, Europe’s population was expected to decline by 96m in that period.

“Incoming migration would have to expand at virtually impossible rates to offset declining support ratios, that is, workers per retirees,” the UN report said.

It estimates that France would have to bring in nearly 90m migrants to 2050 to maintain 1995 support ratios, compared with the nearly 4m projected. Germany would have to accept more than 181m immigrants, against 10.5m projected between 2000 and 2050.

Europe does not need to replicate previous support ratios, but still the prognosis is grim.  By the way, don’t take this as an argument against immigration, there is no way to solve the problem without it.  But many different things will have to go well to avoid a major European fiscal crisis.

And this fact will surprise many:

The study revealed that Latin American immigration to the US roughly doubled over the 1990s, while the total number of Latin American migrants remained stable, as the end of military conflicts in Central America allowed many migrants to return home…

Here is the full story. Here is the original UN report.


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