UNIVERSITY OF CASSINO AND SOUTHERN LAZIO

DEPARTMENT OF ECONOMICS AND LAW

Master Thesis in

Immigration And Economic Prosperity In Western Europe

DISSERTATION SUBMITTED TO THE DEPARTMENT OF ECONOMICS AND LAW,

UNIVERSITY OF CASSINO AND SOUTHERN LAZIO, IN PARTIAL FULFILLMENT OF

THE REQUIREMENT FOR THE AWARD OF A MASTER OF SCIENCE DEGREE IN

ECONOMICS AND ENTREPRENEURSHIP

Supervisor Candidate

Prof. LUISA NATALE EMMANUEL DONKOR

Code.0047963

Academic Year 2018-2019

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DECLARATION

I hereby declare that the result of this dissertation is from my own research, doesn’t
affiliate the supervisor or the department and that, to the best of my knowledge, it
comprises no material previously published by another person nor material which has
been accepted for the award of any other degree in this University or elsewhere,
except where due acknowledgement has been made.

Emmanuel Donkor ................................... ...............................

(Candidate) Signature Date

Supervisor

I certify that this research was conducted under my supervision

Professor Luisa Natale ................................... ...............................

(Supervisor) Signature Date

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ABSTRACT

Migration is an ancient phenomenon with which several approaches and methods had
evolved in order to understand it complexities. Despite the scholarly attention given to
this discipline, little has been done on how the net gains emanating from immigration
is shared, occupational distribution of migrants in order to categorised them into
skilled and unskilled, policies targeting skilled migrants and its complication to origin
countries of migrants.

According to Myers et al 1995 and Shlay 1995, housing plays a central role in
determining the social and economic well-being of families and households, unequal
access to high-quality housing may restrict the upward mobility of the affected groups.
The paper finds that one percent increase in overcrowding rate will increase housing
cost overburden rate significantly whereas addition of one person to household
decreases housing cost overburden rate but insignificantly. From my analytical point
of view, this can have both positive and negative effect on a country’s economic
prosperity depending on the country’s level of concentration management, regulatory
policies, regular delimitations of urban borders or boundaries, accurate dataset on
immigrants (to inform policies) and a receptive mechanism to reshape and put all
immigrants’ skills into active use.

According to scholars like Gould (1994) and Head and Ries (1998), immigrants may
cut down the costs of exporting or importing services to and from their country of
origin by helping domestic firms overcome cultural and institutional barriers with the
foreign market.

This research therefore explored how international migration affect economic

development or prosperity taking into consideration competition for labour,
integration, livelihood diversity, housing, micro and macroeconomic point of view. It
was concluded with evidence (using multiple regression and VAR time-series analysis
from 1970 to 2017) to the effect that, immigration affect economic prosperity
positively but it degree or magnitude of effect is dependent on the country under
consideration and on the average immigration had an insignificant positive effect on
Western Europe economy with respect to the selected countries.

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ACKNOWLEDGEMENT

I would like to thank Almighty God for the opportunity, guidance, protection and
wisdom given me throughout the study. I also express my profound appreciation to
my industrious Supervisor, Professor Luisa Natale for the meticulous guidance and
support to see the work accomplished. Her patience, advice and constructive
criticisms have proved priceless to the success of this work. To her, I say “God richly
bless you”.
A heartfelt gratitude to Professor Ciprian Panzaru at ‘The West University of
Timisoara’, Romania for his unflinching love and scholarly support in making this
research a success. To him, I say “God bless you abundantly”.
Special thanks go to the lecturers and staff of the Department of Economics,
University for Cassino and Southern Lazio, for their scholarly advice and
encouragement during the period of study.
My gratitude also goes to my hard working parents who supported me through their
prayers and financial assistance throughout this research, I pronounce more grease to
their elbows and may God richly bless them all.
My acknowledgement cannot be complete without recognizing the help rendered to
me by Edward Kyei Twum, Millicent Oduro-Boateng, Joseph Henry Djardo and
Abeka Stephenson who gave me their laptop when mine got spoilt and also assisted
me with some information in completing my dissertation.

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DEDICATION

This research work is dedicated to my family, friends and laziodisu, now disco, for
their unending support and encouragement throughout my stay in Italy.

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 Table of Contents
DECLARATION…………………………………………………………………….ii
ABSTRACT…………………………………………………………………………iii
ACKNOWLEDGEMENT………………………………………………………….iv
DEDICATION……………………………………………………………………….v
TABLE OF CONTENT……………………………………………………………..6
LIST OF PLATE…………………………………………………………………….7
LIST OF FIGURES…………………………………………………………………7
LIST OF TABLES…………………………………………………………………..8
Chapter one.................................................................................................................11

1.1 Background.........................................................................................................11

1.2 Problem Statement..............................................................................................13

1.3 Research Questions............................................................................................ 13

1.4 Research Objectives........................................................................................... 14

1.5 Justification or Relevance of the Study.............................................................. 14

1.6 Research Methodology.......................................................................................14

1.7 Limitations of the Study..................................................................................... 18

1.8 Organization of the Report................................................................................. 19

Chapter two................................................................................................................ 20

Definitions and Literature Review........................................................................... 20

2.0 Migration............................................................................................................ 20

2.1 Immigration and social inclusion....................................................................... 26

2.1.1 Social inclusion and social integration of immigrants.................................... 28

2.2 Immigration and Urbanisation............................................................................29

2.2.1 Housing and housing characteristics of immigrants........................................30

2.2.2 Livelihood and livelihood diversification of immigrants................................31

2.3 Immigration and competition (in the context of Labour Market)...................... 33

2.4 Immigration and the economy............................................................................34

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 2.4.1 Immigration and choices................................................................................. 34

2.4.1.2 Immigrants and Risk diversity......................................................................36

2.4.1.3 Immigrants skills and productivity...............................................................36

2.4.2 Macroeconomic concepts and migratory influencing variables...................... 37

a) Immigrants and GDP per capita........................................................................... 37

b) Immigrants and trade............................................................................................38

2.5 Immigration theories and conceptual economic framework.............................. 39

2.5.1 Overview of the elements of the conceptual framework.................................44

Chapter Three............................................................................................................ 47

Data sources and Analysis......................................................................................... 47

3.1 Immigration and social inclusion....................................................................... 51

3.2 Immigration and Urbanisation............................................................................55

3.3 Immigration and competition............................................................................. 64

3.4 Immigration and Unemployment....................................................................... 65

Chapter Four.............................................................................................................. 70

Immigration effect on Demography and the Economy, the case of Germany..... 70

4.1.1 Recent evolution of immigrants in Germany.................................................. 76

4.1.2 Population pyramid for 2017...........................................................................79

4.1.3 Cumulative trend of foreign population.......................................................... 81

4.1.4 Immigration structure of people seeking asylum protection........................... 82

4.2 Immigration and Economy................................................................................. 84

4.2.1 Immigration and location choices................................................................... 87

4.2.2 Trend of migrant’s remittances, the case of Germany, Norway and Sweden. 90

4.2.3 The link between immigration and GDP: an empirical analysis..................... 92

Chapter Five............................................................................................................... 98

Findings, recommendations and conclusion............................................................ 98

5.1 Employment and competition.............................................................................98

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 5.2 Entrepreneurship.................................................................................................99

5.3 Housing...............................................................................................................99

5.4 Demographics.....................................................................................................99

5.5 Integration.........................................................................................................100

5.6 Remittance........................................................................................................101

5.7 Economic growth..............................................................................................101

Conclusion.................................................................................................................103

Reference................................................................................................................104

Appendices............................................................................................................. 115

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 LIST OF PLATE

Plate 2.1: Origin and destination factors and intervening obstacles in migration 25

Plate 3.1: Map for Labour Market analysis from 2016 employment rate 65

Plate 4.1: Trend of total fertility rate and immigration in Germany (1970-2016)
72

Plate 4.3: Age structure of people seeking protection, 2017 81

LIST OF FIGURES

Figure 3.1: Immigration trend 47

Figure 3.2: Non-EU Regular Immigrants in Italy 49

Figure 3.3: Crude Rate 50

Figure 3.4: Employment rate by sex, age group 15-64, 2017 53

Figure 3.5: overcrowding rate of Non-EU citizens by broad age cohort (18-over) 56

Figure 3.6: Housing cost overburden rate of Foreigners by broad age cohort (18-over)

Figure .3: Housing cost overburden rate by countries and citizenship, 2016 64

Figure 3.8: Unemployment rates by sex, age (20-64 years) and country of birth (%),
2017 69

Figure 4.1: Cumulative trend of Foreign Population and by nationality (2009-2017) 82

Figure 4.2: Persons aged 25 to 35 and with a university degree (2005-2016) 85

Figure 4.3: Employment rate (15-64 years) by region 89

Figure 4.4: Trend of migrant’s remittances balance, the case of Germany, Norway and
Sweden 93

LIST OF TABLES

Table 1.1: Variables and data sources for immigration housing overburden cost
analysis 15

Table 1.2: Variables and data sources for immigration and economic prosperity
analysis 17

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Table 3.1: Reasons for annual inflow of Non-EU citizens to Italy 48

Table 3.2: Employment rate of foreigners between 15 to 64 years and by sex 51

Table 3.3 Residence permit of immigrants in Italy by age for 2016 and 2017 54

Table 3.4: Educational attainment of immigrants in Italy by sex 55

Table 3.5: Overcrowding rate, by citizenship and by age, 2016 (%) 58

Table 3.6: Housing cost overburden rate by citizenship and by age, 2016 (%) 62

Table 3.7: rates by sex, age and country of birth (%) 67

Table 3.8: Unemployment rate for Non-EU Migrants by sex and age 68

Table 4.1: Arrivals, departures and net migration in Germany (1965-2017) 77

Table 4.2: Immigration structure share of persons seeking protection (2007-2016) 83

Table 4.3: Private households for 2017 87

Table 4.4: Multiple regression result for housing overburden cost and immigration
(2004-2017) 88
Table 4.5 Trend of migrant’s remittances, Germany (2010-2017) 92

Table 4.6: Multiple regression results for GDP as dependent variable (1970-2017) 94

Table 4.7: VAR Granger causality/Blocked Exogeneity Wald Test for Germany 95

Table 4.8: VAR Granger causality/Blocked Exogeneity Wald Test for Norway 96

Table 4.9: VAR Granger causality/Blocked Exogeneity Wald Test for Sweden 97

Appendix

Table 3.9: Immigration stock by educational level (brain drain) for the selected
countries. 117

Table 3.10: Educational attainment of immigrants only in Italy and by sex 118

Table 3.11: Some obstacles for getting suitable job by foreign born immigrants (first
and second generation of immigrants) in 2014; 119

Table 4.10: Total fertility rate (per woman) by years and citizenship of the mother, Germany
(1991-2017). 120

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 Chapter one

1.1 Background

The world’s population has grown rising nearly 170% from about 3 billion (in 1960)
to 7.7 billion (as at February, 2019). As a result, the share of the world’s population
living outside their countries of birth has increased for the past 50 years. In 1960,
3.1% of the world’s population did not live in their birth countries and this increased
to 3.4% in 2015(McKinsey Global Institute, 2016: pg.9). In the context of
International migration, the absolute number has grown considerably over the past 50
years, from about 79 million in 1960 to nearly 250 million in 2015, a 200% increase.

Preliminary data for OECD (2014) suggest that permanent migration flows increased
sharply for the first time since 2007 and are back to their pre-crisis level, with 4.3
million permanent entries to the OECD. Family reunification migration accounted for
35% of all permanent migration to OECD countries in 2013 and free movement for
30%. Europe has become ‘a continent of immigration’ in the course of the last half
century, and European societies have experienced growing ethnic and cultural
diversity (Okolski2012). For instance, from the moment immigrants arrive in a host
society, they must “secure a place” they can call home, a job and income, schools for
their children, and access to health facilities. These to an extent also put them in a
position to apply for family reunification as well as inviting relatives from their
country of origin which perhaps in the long-run would result in cultural and skill
diversity. Embedded in this diversity is the capacity of international migrants to affect
or be affected by the host country’s economic orientation, integration processes and
policies. These mechanisms often attribute to the variation of fiscal impact of
immigration on OECD countries and it cannot be pinned down to a single figure, as
its measurement depends on series of key assumptions, including the degree to which
the cost for the public purse of certain public services and the public capital stock
(such as infrastructure and public administration) and non-personal taxes (such as the
corporate income tax) explained by OECD outlook, 2013.

In countries where recent labour migrants make up a large part of the immigrant
population, immigrants have a much more favourable fiscal position than in countries

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where humanitarian migrants account for a significant part of the immigrant
population. For the vast majority of countries, the labour market outcomes of migrants
and natives have been either stable or improving in recent years.

On one hand, immigrant’s employment status is seen as one of the most important
determinant of migrants’ net fiscal contribution, particularly in countries with
generous welfare states. Therefore, raising immigrants’ employment rate to that of the
native-born would entail substantial fiscal gains in many European OECD countries,
in particular in Belgium, France and Sweden, which would see a budget impact of
more than 0.5% of GDP (MPD No.2, May 2014).

On the other hand, the proportion of highly educated immigrants in OECD countries
is rising sharply. The number of tertiary-educated immigrants in OECD countries
showed an unprecedented increase in the past decade (up by 70%), reaching a total of
almost 30 million in 2010/11 (MPD No.2, May 2014)

The contribution of immigrants to human capital accumulation tends to counteract the

mechanical dilution effect (i.e. the impact of population increase on capital per
worker), but the net effect is fairly small, including countries which have highly
selective migration policies. An increase of 50% in net migration of the foreign-born
generates less than one tenth of a percentage-point variation in productivity growth
(Boubtane and Dumont, 2013).

Contrary to these positive results on the effects of immigration, Coleman and

Rowthorn (2004) find that the purely economic consequences of large-scale
immigration are not equally distributed, giving rise to winners and losers. However,
they also argue that the purely economic dimension of immigration is negligible in
comparison with the demographic, social and environmental issues that come with it.

Empirical literatures have examined the causality between immigration and economic
growth on data from different countries (Morley, 2006). The perspective of these
existing researches was based on the fact that immigrants take into account job
avenues in their decision to migrate and these economic activities are likely to have a
significant impact on migration policies and economic growth. Broadly, the empirical
paper on causal link between immigration and economic activity of destination
countries find no evidence of immigration predicting economic growth, but rather

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finds an inverse causation. In 2015, the world’s 247 million international migrants’
contribution to the world’s economy amounted between 6.4 and 6.9 trillion US dollars
worldwide, or 9.4 percent of global GDP. Meanwhile, 90% of all economic benefits
gained through migration are dispersed across 25 countries, including Australia,
Canada European nations, and USA (McKinsey Global Institute, 2016: pg.7–8). The
economic effect of international migration has been intensively studied but is still
often driven by ill-informed perceptions, which, in turn, can lead to public antagonism
towards immigration.

1.2 Problem Statement

Many scholarly articles, books and literatures deals with the subject matter by
addressing issues of mass immigration and economic growth coupled with trends and
challenges that immigrant face. Little has been done on how the net gains emanating
from immigration is shared, occupational distribution of migrants in order to
categorised them into skilled and unskilled, policies targeting skilled migrants and its
complication to origin countries of migrants, how immigrants are integrated and
included in socio-cultural context of host countries to boost their sense of social
capital in maximising economic growth, and how livelihood options made available to
immigrants affect urbanisation.

In the light of this, the paper seeks to investigate the causality relationship between
immigration and economic prosperity (or economic growth which is used
interchangeably in this paper) of some countries in Western Europe using the multiple
regression and VAR Granger causality testing approach.

1.3 Research Questions

The general research questions include economic framework and theories of

immigration, competition for skilled labour of immigrants, and how immigrants are
integrated into host country’s economies? Specific research questions of the study
were considered due to measurement issues relating to the general questions and also
to help set smart objectives for the study. These questions include the following;

(i) What is the immigration trend of some Western European countries?

(ii) How does immigration affect economic prosperity, with particular
reference to the case of Germany, Norway and Sweden?

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 (iii) How does housing overburden cost rate affect immigration?

(iv) What are some of the conceptual theories of immigration and fertility?
(v) What is the trend of employed foreigners by country in Western Europe?

1.4 Research Objectives

The general objective is to examine how the trend of immigration affects economic
prosperity in Western Europe. The study sought to address the following specific
objectives;

(i) To identify the immigration trend of some Western European countries.

(ii) To explore how immigration affect economic prosperity
(iii) To understand how housing overburden cost rate affect immigration
(iv) To identify and understand some theories of fertility and immigration.
(v) To identify the trend of remittances received and sent from Western
Europe, case of Germany, Norway and Sweden.

1.5 Justification or Relevance of the Study

The study will complement the existing stock of literature in the subject area, and the
findings can be the basis for others to formulate research problems within the study
area or elsewhere.

Some of the findings and recommendation of the study can also serve as bases for
policy formulations related to immigration and economic growth (or prosperity) in
some destination countries.

1.6 Research Methodology

Cross-sectional design with qualitative, quantitative, panel and empirical research

approaches was employed for the study. The use of this design helped in acquiring
information on immigration trend diversities as well as the considered variables. On
one hand, qualitative approach helped in exploring the in-depth, richness, and
complexity inherent in the phenomenon whereas the quantitative approach also helped
in testing relationship between and among variables. On the other hand, empirical and
panel research approach helped in basing the study’s findings on direct or indirect
observation as its test of reality and trends of the studied phenomena respectively,

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 without being bias. Stratified sampling was adopted based on characteristics such as
income, educational level, housing quality, skilled level etc. In the context of this
study, data was collected from secondary sources and the result is based entirely on
secondary data collected. The data was collected in line with the study objectives.
Time series information on immigration flow, housing overburden cost and
over-crowding rate, labour market per country and regional employment rate were
considered as well as other socio-economic variables such as education,
unemployment, integration and social inclusion only to mention a few. In addition,
materials or literature on the subject matter was sourced from documented
information which enhanced the investigators’ understanding of issues related to the
subject matter and comparison of findings. These included data collected from
books, journals, articles, government publications, and the internet.

In order to ensure a discrete analysis of both qualitative and quantitative data, the data
collected from all the various sources were analysed using excel and Eviews (an
econometric data processing package). Multiple regressions were also fit to explain
housing overburden cost rate indices on the basis of some logically hypothesized
variables and its overall significance. The variables are shown below:

Table 0.1: Variables and data sources for immigration housing overburden cost analysis

Variables Meaning of Abbreviations Data sources

D(GER_HOCR) as Average housing overburden Eurostat (ilc_lvho25),

dependent variable cost rate in Germany 2018

D(GER_OCR) as Overcrowding rate in Eurostat (ilc_lvho15),

independent variable Germany 2018

D(GER_HOUSEHOLD) Household in Germany with Statistisches Bundesamt

as independent variable immigration background (Destatis), 2018

Similar to simple regression equation, the general form of multiple regression

equation is expressed as y = c + b1x1 + b2x2 + . . . + b k x k. where y is the dependent
variable, c is the constant, b1, b2, b k are the unstandardized coefficient of the
independent variables denoted as x1, x2 and x k respectively. k is the number of

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independent variables. However, the regression model used in this study (with the
help of eviews) is calibrated as; D(Ger_Hocr) = C1 + C2*D(Ger_Hocr(-1)) +
C3*D(Ger_Ocr(-1)) + C4*D(Ger_Household(-1)) Where C1, is the constant and C2, C3,
and C4 are the coefficients of the respective independent variables. The following
hypotheses were specified in testing the relationship between housing overburden cost
rate and the independent variables;

H0: the two classification variables are independent of each other or the independent
variable does not predict the dependent variable if p-value is greater than 0.05

H1: the two classification variables are not independent or the independent variable
predict the dependent variable if p-value is less than 0.05

Immigration and Economic Growth

Vector Autoregressive Granger causality estimation was used to assess whether

immigration affect or has an effect on economic prosperity. Granger (1969) proposed
a time-series data based approach in order to determine causality. In the
Granger-sense X (independent) is a cause of Y (dependent) if it is useful in
forecasting Y. In this framework ”useful” means that X is able to increase the
accuracy of the prediction of y with respect to a forecast, considering only past values
of Y. There are three different types of cases in which a Granger-causality test can be
applied:

 In a simple Granger causality test there are two variables and their lags.
 In a multivariate Granger causality test more than two variables are included,
because it is supposed that more than one variable can influence the results.
 Granger causality can also be tested in a VAR framework, in this case the
multivariate model is extended in order to test for the simultaneity of all
included variables.

The empirical results presented in this paper was estimated within a multivariate
Granger-causality test with the help of Eviews in order to test whether the
independent variables below ”Granger cause” economic growth using time series data
from 1970 to 2017. Missing values of two selected variables was encountered and was
automatically adjusted using Eviews. Annual GDP growth rate was used as a measure
for economic growth. Annual GDP growth has become a measure of what is good and

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bad or for success and failure in any given economy. The fact that migration has
either positive or negative impacts on an economy or on receiving and sending
countries’ GDP growth may lead to conclusions that migration is good or bad and this
is the rationale behind why Annual GDP growth was a considered as a measure.
Below are the variables considered:

Table 0.2: Variables and data sources for immigration and economic prosperity analysis

Variables Meaning of Abbreviations Data sources

GDP_GROWTH Annual GDP growth rate countryeconomy.com

(2018): OECD, 2018:
World bank, 2018

HDI_EDU (calculated Human Development countryeconomy.com

using Mean Years of Index for Education (2018): UNDP, 2018
Schooling and Expected
Years of Schooling
concept by UNDP).

FOREIGN_EMP and Foreign Nationals who are OECD, 2019

GEN_EMP (using both employed and General
Eurostat’s and OECD employment respectively
definition)

NET_MIGRA/NET_MR Net migration Statistisches Bundesamt

(Destatis), 2018: Statistisk
sentralbyrå (2018): Scb.se
(2018)

The first step in this analysis concerns the stationarity of the dependent and
independent series. Granger causality requires that the series have to be covariance
stationary, so an Augmented Dickey-Fuller test was considered. For all of the series
the null hypothesis H0 of non-stationarity can be rejected at a 5% confidence level.
Hence, some of the considered variables had to be differenced in order to make it
stationary to assess the significance level and goodness-of-fit of the selected variables
in the model. It is simple to test Granger causality or, in other words, to test H0 : β1
= 0: if β1 is statistically significant (thus when its p − value is less than 0.05 ), then we

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conclude that X Granger causes Y. Note that the null hypothesis being tested here is
hypothesis that Granger causality does not occur . Again, the stationarity of variables
for the VAR estimation and errors in the VAR system was tested through series of
tests (including heteroskedasticity, cholesky normality test, LM test, the use of
t-statistics, and AR Root modulus values), however, cointegration analysis was not
included.

Then, since the Granger-causality test is very sensitive to the number of lags included
in the regression, both the Akaike (AIC) and Schwarz Information Criteria have been
used in order to find an appropriate number of lags. Estimation of VAR was done
using the independent variables (X) as endogenous variables and the intercept as an
exogenous variable with lag interval of 1 as suggested by the lag length criterion
(from both Akaike (AIC) and Schwarz) and confirmed using AR root graph after
which the Granger causality test was done using lag structure’s button from the
drop-down of view button in Eviews.

This paper focused on the dependent variable results for only economic growth (GDP
growth) and immigration. Based on the estimated p-values from the VAR results,
three different hypotheses about the relationship between GDP growth and
immigration can be formulated:

H1 Unidirectional Granger-causality between GDP growth and immigration. In this

case addition of one immigrant increases the prediction of growth rate of the economy
but not vice versa.

H2 Bidirectional causality. In this case the growth rate of the economy increases the
prediction of inflow of immigrants and vice versa.

H3 Independence between GDP growth and immigration. In this case there is no

Granger causality in any direction.

1.7 Limitations of the Study

Some of the limitations encountered by this paper includes the need to pay for some
online data sources before one gets access to requested or needed data or book. This
to some extent made the researcher use available data which had missing values
though from internationally recognised source. This paper used Eviews which
automatically adjust the missing values and the OLS estimation results was significant

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with cusum of squares test showing no data breaks. Again, limited variables were
considered due to data related issues so the paper couldn’t make a sweep generalised
statement since there are several variables that influences the prediction of GDP
values though the variables selected had a significant prediction power to the values
of GDP.

Moreover, the geographical scope of this paper required primary observations,

interviews and studies on the phenomenon but these was not achieved because of
funding. In order to maintain a degree of reliability and accurate measurement, data
was sourced from recognised sources reflecting the true weight of the phenomenon
studied as shown in the conducted empirical analysis and results emanating from the
three Western Europe countries(namely Germany, Norway, and Sweden). Therefore
the results of the selected group of countries shouldn’t be used for a generalised
analysis regarding the whole Western Europe. This paper suggests that its findings
should be considered with respect to the specific countries selected since the
phenomenon is complex and outcomes might differ by countries within the region.

1.8 Organization of the Report

This paper is organized into five chapters. Chapter one constitutes the background of
the study, problem statement, research questions and objectives, justification or
relevance of the study, research methodology and some perceived limitations during
this research. Chapter two also constitutes the literature review, indicating relation to
the research problem under study. The focus of chapter three is on data analysis and
presentation with maps, graphs and tables. Chapter four presents detailed study on
Germany as well as empirical results and analysis on some selected countries within
Western Europe. This research ends with Chapter five which highlight the findings,
recommendations and conclusion of the study.

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 Chapter two

Definitions and Literature Review

2.0 Migration

This study area has a lot of terminologies that cannot be understated since the main
drivers of migration are based on the understanding regarding the concepts of the
phenomenon. Spatial mobility of population is a topic of paramount interest to
scholars and the public as a whole since it has effects upon the distribution and
interaction between other demographic forces as well as with other aspects of social
and economic change and differentiation.

On one hand, Clarke, J.I. (1965, 123 p.) said, “there is no unanimity over the meaning
of migration' though many consider it as movement involving a change of residence
of substantial duration. Clarke was of the opinion that migration cannot be defined
perfectly as it involves a wider range of elements. Therefore, definition of human
migration remains inconclusive. Trewartha, G.T. (1969, 136 p.) placed emphasis on
distance, human will and change in permanent residence in migration”.

Definition of migration is broadly based on change in residence, journey to work,

types of boundaries crossed, and many others (Demko, G. J. et al, 1970, pg. 286 p).
Lee, E.S. (1970, 290 p.) further sort to provide a definition through a theoretical
background for the spatial movement of populations. In his words, “migration is
defined broadly as a permanent or semi-permanent change of residence”.

Eisenstadt, S.N. (1953, pp. 167-180) on the other hand defined migration as, ‘the
physical transition of an individual or a group from one society to another. This
transition normally involves abandoning one social setting and entering another, and
different one’.

Similarly, Antonio Golini (2000) used a typology that sought to explain modern
migration. Inferring from Golini’s definition, he argued that modern migration
revolves around 5 elements or criteria (namely distance, recurrence, duration, causes,
and legality). As cited by Caselli et al (2005), the first criteria of Golini’s typological
study of modern migration states that “there is no minimum distance for migration,
and any change of house, building, neighborhood, municipality, region, country,
continent, or any other defining area is a geographic migration that lends itself to

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analysis, but it will vary in the nature of its determinants and consequences.” This to
some extent talks about the geographical space within which movement takes place.

Recurrence and duration criteria of his studies are inseparable to some extent and may
also vary widely considering frequency and time dimensions respectively. Whiles
recurrence was looked at how frequent movement take place, duration on the other
hand is categorised into short (migrants staying less than 1 year in their respective
destinations) and long (migrants who stay more than 1 year in their respective
destinations).

Migration is a complex phenomenon which varies widely relative to the prefatorial

criteria, with the cause of the move ranging from pulling factors or what I called
implicit migratory incentives (employment, family reunion, education among others)
to pushing factors or explicit migratory incentives (thus, catastrophes and other acts of
nature such as floods, earthquake; war; repression; military occupation; pressure of
political)

Regulating the above-mentioned criteria called for the emergence and enforcement of
a host country’s laws and universal laws regarding migration due to demographical
implications and globalization. In light of this, a distinction was drawn between legal
and illegal migration (Golini, 2000). Inferring from the third (or duration) criterion,
“Golini first distinguishes between three types of territorial mobility: migratory
mobility (i.e., any non-involuntary change of place of residence), pseudomigratory
mobility (i.e., compelled by natural catastrophes or pressure of political or religious
events), and non-migratory mobility and other territorial moves (i.e., vacationing,
occupational, and other moves). He cross-references these three types of mobility
with the three other criteria (i.e., geography, time, legality) to obtain the full typology
sought”. (Caselli et al, 2005). The propensity to migrate, like the propensity to
procreate, depends on a very complex, often interacting set of individual and
collective economic, political, social, cultural, ecological, psychological, and other
factors that vary in time and space (Caselli et al, 2005 p.263). These assertions
became grey area for advanced researchers and scholars since one of the critics was
that, Golini’s typology comparably was based on only one classification and therefore
drew attention to other variables to broaden the conceptual understanding of the
phenomenon.

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According to Population Association of America (1988), most statistical offices (in
United States) “define” migration as a relatively permanent change of residence that
crosses jurisdictional boundaries (counties in particular), measured in terms of usual
residence at a prior point in time, typically one to five years earlier. Local moves
within jurisdictions are referred to as residential mobility.

Parallel to this, a convention held by UN (1998) to review existing literature on some

concepts of the phenomenon led to one of the most accepted definition of migration as
a change in place of abode, or place of "usual" residence. Embedded within the
framework is a restricted concept of migration, that there are number of subsidiary
conceptual and procedural problems. Change of residence or residential mobility, like
mobility in general, varies along a distance continuum. Inferring from this conceptual
debate, the use of the term "place" in UN’s (1998) definition indicates that such short
moves (such as movement from one house to another in the same neighbourhood or
town) are not so considered. However, this may create acute data comparability
problem of migration research (with emphasis on internal migration) since areal units
varies in size and characteristics.

In summary, I will define migration as a defining area whereby a person changes a

place of usual residence (at a minimum distance) resulting from an inherent and
external forces of globalization with respect to a specified period of time. There are
three key areas that affect the relationship between migration and development: the
effects of emigration of people on short and long term (loss of skills, circulation
potential and return migration or of return to the society of origin); the impact of
financial flows (remittances and investments); the role of diaspora populations (World
Bank, 2005). Therefore, good migration policies must go beyond local impact and
consider the mutual effects worldwide since migration is based on relative differences
in socio-economic development between countries of origin and that of destination of
migrants.

Sequentially, it has become important in understanding the meaning of a migrant and

a refugee since it is normally used interchangeably. The number of international
migrants is between 185 and 192 million constituting approximately 3% of the
world’s population (UN, 1997). The term migrant can be understood as "any person
who lives temporarily or permanently in a country where he or she was not born (or

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changed place of usual residence), and has acquired some significant social ties to this
country." However, this may be a too constrictive definition. According to some
states' policies, a person can be reasoned as a migrant even when he or she is born in
the country.

Addressing such conceptual issues made UN Convention on the Rights of Migrants

(2003) to define a migrant worker as, a "person who is to be engaged, is engaged or
has been engaged in a remunerated activity in a State of which he or she is not a
national." From this, a broader definition of migrants was coined “covering all cases
where the decision to migrate is taken freely by the individual concerned, for reasons
of 'personal convenience' and without intervention of an external compelling factor."
This definition to some extent indicates that migrant does not refer to refugees,
displaced or others forced or compelled to leave their homes. Migrants are people
who make decisions and choices about when to leave and where to go, even though
these choices are sometimes extremely constrained.

According to Hagerstrand (1957), migration is the movement between defining areas

with respect to some specified minimum distance but migrant on the other hand refers
to a person who changes the place of usual residence. Inferring from this, however,
the number of migrants is lesser than the number of migration (defining areas) during
a specified period of time. Below are some of his terminologies used in context;

a) In-migrant

An in-migrant is thus a person who enters a migration or defining area by crossing its
boundary from some point outside the area, but within the same country. He is to be
distinguished from an "immigrant" who is an international migrant entering the area
from a place outside the country

b) Out-migrant

An out-migrant is a person who departs from defining area by crossing its boundary to
a point outside it, but within the same country. He is to be distinguished from an
"emigrant" who is an international migrant, departing to another country by crossing
an international boundary

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c) International migrant

Under the United Nations recommendations, an international migrant is defined as

any person who changes his or her country of usual residence for at least one year, for
any purpose. The crossing of an international border, with a change of usual residence,
differentiates international migration from internal migration, which takes place
within national borders.

d) Immigrant

An immigrant is a person born in a country other than his or her country of residence,
who has thus crossed a border (or several) since his or her birth. Migration has a
significant economic impact on both sending and receiving countries. From the point
of view of developed economies, which usually play the role of host countries, there
are two distinctive views on the conceivable effects of immigration.

First, changes in population structure are ascertained by three demographic processes:

fertility, mortality and migration. Immigration can be regarded as one potential
solution to the challenges presented by the population ageing process that is currently
ongoing in most advanced economies. While fertility and mortality generally tend to
adjust slowly and have a long-term impact on demographic structure and transition,
migration can change rapidly, thereby playing a more significant role in the short run.
The rationale behind this remedy is that migrants tend to be younger than the native
population on average, and therefore will be able to replace falling native working age
population during the (demographic) transition period.

Second, the overall impact of immigration on the host economy can be analysed from
the viewpoint of competition. The main argument is that immigrant workers apply for
welfare benefits and use free (or subsidised) public services which extends to the
public purse, compete with natives for jobs and this result in higher unemployment
and lower pay for native workers. According to Dustmann et al (2008) and Lemos et
al (2008), there is no significant evidence that the expansion of immigration leads to
negative labour market outcomes for native-born workers.

Migration don’t just happen unless humans allow it based on some pressing factors.
These factors which goes into the decision to migrate and the process of migration
may be summarized broadly under four categories as follows:

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1. Factors related to the area of origin.

2. Factors related to the area of destination.

3. Intervening obstacles.

4. Personal factors.

According to Stouffer (1940), the first three factors indicated schematically in Chart 1
evinced that in every area there are countless factors which act to hold people within
the area or attract people to it, and there are others which tend to repel them. These
are shown in the diagram as + and - signs. There are others, depicted as O's, to which
people are essentially indifferent. Some of these factors affect most people in much
the same way, while others affect different people in different ways. Thus, a good
climate is attractive and a bad climate is repulsive to nearly everyone; but a good
school system may be counted as a + by a parent with young children and a - by a
house owner with no children because of the high real estate taxes engendered, while
an unmarried male without taxable property is indifferent to the situation (Stouffer,
1940). Clearly the set of +'s and -'s at both origin and destination is relative and
differently defined for every migrant or prospective migrant. He distinguished
between classes of people who react in similar fashion to the same general sets of
factors at origin and destination. Indeed, since we can never specify the exact set of
factors which impels or prohibits migration for a given person, we can, in general,
only set forth a few with rational and empirical assumptions which seem of special
importance and note the general or average reaction of a considerable group. Needless
to say, the pull and push factors are precisely understood neither by the social scientist
nor the persons directly affected.

Plate 2.1: Origin and destination factors and intervening obstacles in migration

Source: Everett S. Lee (1966): “A theory of Migration,”

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There are, however, important differences between the factors associated with the
area of origin and those associated with the area of destination. Persons living in a
defined geographical space have an immediate and often long-term acquaintance with
the area and are usually able to make considered and unhurried judgements regarding
them. This is not necessarily true of the factors associated with the area of destination.
Knowledge of the area of destination is seldom exact, and indeed some of the
advantages and disadvantages of an area can only be perceived by living there. Thus,
there is always an element of ignorance or even mystery about the area of destination,
and there must always be some uncertainty with regard to the reception of a migrant
in a new area.

Ultimately, there are many intrinsic factors which affect individual thresholds and
facilitate or retard migration. Some of these are more or less constant throughout the
life of the individual, while others are connected with stages in the life cycle and in
particular, with the sharp breaks that denote transition from one stage to another. In
this connection, it is revealed that the propensity to migrate does not necessarily
depend on the actual factors at origin and destination as the perception of many allows.
Personal sensitivities, intelligence, entrepreneurial alertness and awareness of
conditions elsewhere goes into the evaluation of the situation at origin, and
knowledge of the situation at destination depends upon personal contacts or upon
sources of information which are not universally available and symmetrical.

Primarily, regional development is driven by changes in the hierarchy of capital

investment in order to change the balance between resources transferred. There are
divergence or large variations between regions and countries regarding migration rate.
Migration flows occur from underdeveloped regions or developing countries towards
developed regions which provide financial opportunities above those of the country of
origin and this why the study seeks to explore further migration flows and events in
Western Europe (a case of Austria, Belgium, France, Germany, Italy, Norway,
Netherlands, New Zealand, Spain, and Sweden)

2.1 Immigration and social inclusion

The word social cohesion and social inclusion is used interchangeably. There is no
universally accepted definition of social cohesion in the international literature and its
implication as well as measurement is dependent on how the concept is defined. On

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one hand, Maxwell (1996:13) defined social cohesion as building shared values and
communities of interpretation, reducing disparities in wealth and income, and
generally enabling people to have a sense that they are engaged in a common
enterprise, facing shared challenges, and that they are members of the same
community. The focus of this definition was on cohesion with reference to quality of
civic participation, accessibility of infrastructure and services to all as well as laying
emphasises on the importance of labour markets and economic engagement through
equitable participation.

According to Jane Jenson (Canadian social theorist) on the other hand, “socially
cohesive society” is one where all groups have a sense of “belonging, participation,
inclusion, recognition and legitimacy” (Jenson 1998). However, coupled with other
factors, this definition failed to state if the participation element is absolute or relative.
Paul Spooley et al cited Beauvais and Jenson (2002) interactive elements of social
cohesion as a:

• Common values and a civic culture

• Social order and social control
• Social solidarity and reductions in wealth disparities
• Social networks and social capital
• Territorial belonging and identity.

I realised that the above element seeks to address issues or development gaps
regarding fragmentation and weakened social and policy values, exclusions,
redistribution and institutional functioning since “definitional choices considering
these elements have significant consequences for what is analysed, what is measured,
and what policy action is recommended” (Beauvais and Jenson 2002:6).

In parallel with the Jenson’s perspective, however, there has been a tendency to use
social capital as either equivalent to, or as a subset of, social cohesion. Social
cohesion is based on social capital … which is also created by social relations and ties
established, maintained and experienced by individuals (Berger-Schmitt 2000:7)

From my point of view, social cohesion is a practical empathy built on belongingness,

absolute participation, inclusiveness, legitimacy and structural acceptance into a
community or space with respect to time.

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2.1.1 Social inclusion and social integration of immigrants

Social cohesion as a social policy goal for the past decades has emerged as a
prominent issue of public concern in policy statements in relation to outcomes
associated with immigrant settlement (Jeanotte, 2002&2003; and Parekh 2000).

Inferring from the above, several countries in Western Europe proposed social
cohesive, inclusive and integrative policy strategies seeks to break all structural
complexities and gap between immigrants and natives. For instance, the national
Immigration Settlement Strategy of New Zealand Immigration Service in 2004
identified six goals for migrants including:

• To obtain employment befitting to their qualifications and skills

• To participate in civic, community and social activities.
• To form supportive social networks and establish a sustainable community
identity
• To feel safe expressing their ethnic identity and are accepted by, and are part
of, the wider host community
• To be confident using English in a New Zealand setting or can access
appropriate language support to bridge the gap
• To access appropriate information and responsive services that are available to
the wider community (for example, housing, education and services for
children)

The question of measurement was raised by scholars including Kymlicka (2003:3)

since immigrant’s face challenges as they seek to obtain social capital, housing,
education, employment and health care at the very moment they have left many of
their existing networks behind, while the host community often struggles to
understand and accept immigrants (Policy Research Initiative 2003). For instance,
ethnicity, origin or nationality and residence status of migrants are often recorded as
“other”. Analytically, this however makes migrant’s presence as good as their absence
since the first stage of inclusion, cohesion and integration is failed.

Parallel with my assertion, barriers regarding systemic (including particular forms of

indifference and discrimination, lack of recognition of foreign credentials and
qualifications, racial or ethnic discrimination, prejudice in the work environment, lack
of access to affordable housing, and lack of suitable language training, among others)

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and functional dimensions of social cohesion was assessed by Papillon (2002:iii) and
Van der Leun (2003:23) respectively which to some extent “contributed to the social
exclusion of more vulnerable migrants.”

2.2 Immigration and Urbanisation

The management of urban spaces is an essential dimension of sustainable diversity:

urban policies conducive to social sustainability must build bridges among people of
diverse origins and create the conditions for the full inclusion of immigrants into
neighbourhood life, the labour market, and the cultural life of the city. (Papillon
2002:26). UN estimates suggest that over 90% of world’s population growth over the
next 25 years will be in urban areas. By 2025, half the population in Asia and Africa
may be living in cities, and more than 80% in Latin America.

Turning to the impact of migration on regional development, I agree with the

assertion that there is an urban overpopulation due to migration to more developed
urban areas. This remained true even when there has not been a convergence in
Europe regarding the level of prosperity: migrant flows do not focus on areas of
economic growth but seek regions offering employment opportunities.

According to Coombes (2010), migrants tend to work outside the cities due to some
identified factors that attract or repel (push -pull) migrants. For instance, overcrowded
urban areas became a rejection or pushing factor for migrants seeking clean, airy areas,
with a reduced crime rate.

Based on the above, it is laudable to say that, perhaps, there’s a probabilistic causality
between immigration and urbanisation. From my analytical point of view, this can
have both positive and negative effect on a country’s economic prosperity depending
on the country’s level of concentration management, regulatory policies, regular
delimitations of urban borders, accurate dataset on immigrants (to inform policies)
and a receptive mechanism to reshape and put all immigrants’ skills into active use.
This is one of the reasons why this paper seeks to explore such aspect of the study, by
considering the following;

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2.2.1 Housing and housing characteristics of immigrants

Adequate housing is a basic human right and a crucial determinant of environmental

health. According to Myers et al 1995 and Shlay 1995, housing plays a central role in
determining the social and economic well-being of families and households, unequal
access to high-quality housing may restrict the upward mobility of the affected groups.
According to Michael H. Schill et al (1998), housing quality is operationalized using
two measures. The first is a dummy variable indicating the number of maintenance
deficiencies present in the household’s dwelling unit. This indicator is based on the
householder’s report with respect to seven items: toilet breakdowns; heating
breakdowns; the need for additional heat; the presence of rats; leaks from the outside;
cracks or holes in the walls, floor, or ceiling; and wide areas of broken plaster on the
walls. We consider householders whose homes have three or more of these
deficiencies as living in poor-quality housing.

The second measure of housing quality, derived from the interviewer’s observation of
the overall condition of the building in which the household lives, categorizes
buildings as ‘‘unsound’’ or ‘‘sound.’’ Unsound buildings are so defective that they
are considered unsafe and inadequate shelter, while sound buildings are free of
serious defects.

Housing unit preferences are driven in part by demographic factors, such as

transitions through the life cycle (Rossi 1955; Speare et al 1975) and by one's
(socio-economic) resource endowment. For instance, high incomes earners are likely
to specify their housing space in terms of size, materials used and enjoy the most
freedom in choosing where to live. In the same manner, those who are academically
inclined may be better in accessing information about housing stock opportunities.
Immigrants in this regard may perhaps be constrained by their options which may
include their willingness to pay rent, maintenance culture (most influenced by
behaviour), strength of host country's social welfare, among others.

This distinction between immigrants and native residents can be further explained
considering the theory of relative deprivation (RD). Relative Deprivation theory
assumes that one's perceptions and feelings about discrimination depend upon whom
one compares with (K.L. Dion, 1986; K.L. Dion & Kawakami, 1996b, 2000).

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Studies have shown that Blacks and Hispanics immigrants have fewer housing units
(as the case in USA) and are steered toward housing in lower-quality, predominantly
black neighbourhoods (Pearce 1979; Turner et al 1991). Even if blacks and Hispanics
escape the discrimination of real estate agents and home sellers, they may face
discrimination in obtaining home mortgage loans (Munnell et al. 1992). The problem
of overcrowding was greater for immigrant renters than for owners (Myers, Baer, and
Choi 1996). I agree with Knodel et al (1992) that the prevalence of crowding among
immigrants particularly, those who have recently migrated to Western Europe and
USA may be attributable to several factors. This includes

a) Immigrants living with members of their extended family or non-relatives in order

to pool their resources;

b) Immigrants adopting this as an economic strategy to send money back to family

and friends in their country of origin;

c) Cultural dimensions where immigrants living with and care for their extended
families, particularly, elderly as their norm suggest or command to some extent;

d) Immigrants adopting this as a strategy to save on daily expenses and advance their
socio-economic status more quickly.

Many researches regarding the subject matter to an extent has ignored or little has
been done on the severity of the overcrowding and it is in the light of the above, this
research seeks to explore average room occupancy ratio, housing deficit and pattern
as well as condition of immigrants housing unit.

2.2.2 Livelihood and livelihood diversification of immigrants

This is a very important subject of the phenomenon since immigration however

changes the demographic status of the host country. Influx of immigrants in Western
Europe may have the tendency of converting some agricultural lands for residential
and industrial land-uses, cause immigrants to diversify their livelihoods since they
have social responsibilities to the families in their country of origin, and last but not
least, influences immigrants in becoming multi-skilled in other to adapt to the more
sustainable livelihood options and strategies. Considering the black economy of the
immigrant’s labour market, analysis on livelihood as well as livelihood diversification
becomes difficult, but it is important to understand the complexity and diversity of

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migration, its role in the livelihood strategies of households, including also the
possibility that migration increases inequality.
There are little or no evidence on these assertions of mine and this is why the research
seeks to explore this grey area of migration studies. Below are some definitions;
a) Livelihood
Chambers and Conway (1991, p.7 in Erenstein et al, 2007) defined a livelihood to
‘encompass the capabilities, assets (stores, resources, claims and access) and activities
require for a means of living. To them, a sustainable livelihood is one which can cope
with and recover from stress and shocks, maintain or enhance its capabilities and
assets, and provide sustainable livelihood opportunities for the next generation; and
which contributes net benefits to other livelihoods at the local and global levels and in
the short and long term’. A noticeable feature of this definition is its quest to draw the
link between assets and the options people possess in practice to pursue alternative
activities from which they earn a living (Emmanuel et al, 2014)
These issues make the analysis of migration difficult, but it is important to understand
the complexity and diversity of migration, its role in the livelihood strategies of
households, including also the possibility that migration increases inequality.
b) Livelihood diversification of immigrants
According to Ellis (1998) livelihood diversification is the process by which rural
families (households) construct a diverse portfolio of activities and social support
capabilities in their struggle for survival and in order to improve their standards of
living. He rightly emphasized that; livelihood diversification is not necessarily
synonymous with income diversification. He subsequently emphasized that livelihood
diversification involves wage work in agricultural and non-agricultural activities,
non-farm self-employment and remittances from urban centers and abroad. However,
livelihood diversification may be positive or negative depending on whether it
improves security and reduces the impact of seasonality.

Migration is part of active livelihood strategies, but is also determined by social

context (social norms and structures). Household composition, gendered ideologies
and social contacts and networks determine who migrates, and who can profit from
opportunities arising elsewhere (Arjan de Haan, 2000). According to Feraru (2015),
young people are attracted by metropolitan regions while many adult immigrants are

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attracted by regions with immigrants of the same nationality with them. So, the
attributes of a region affect the attractiveness of potential immigrants. The ability to
pursue diversified livelihood strategies is dependent on the basic material and social,
tangible and intangible assets that people have in their possession (Scoones 1998:7).

Livelihood diversification is used in this study to mean the multiplicity of activities

that households adopt in their effort for survival and in order to improve their
standards of living whiles maintaining their financial commitment to their respective
families in the country of origin amidst the challenging influence of urban processes.

2.3 Immigration and competition (in the context of Labour Market)

The economic forces behind this proposition are best illustrated with a simple model
of the overall economy. Suppose for the moment that all workers in the economy are
exactly the same, such that employers can perfectly substitute one employee for
another. Assume further that this “perfect substitutability” extends to the ability of
employers to substitute an immigrant worker for a native worker. We will also assume
that the stock of productive capital (machinery, plants, and equipment) used in the
production of goods and services is fixed. Under these conditions, an increase in
immigration will increase national output, lower the wages and employment of native
workers, and increase total income accruing to the owners of capital (Steven et al,
2007).

Most conspicuously, we assumed that employers can perfectly substitute the average
immigrant worker for the average native worker (and vice versa!). This is clearly
unrealistic because immigrants and natives differ along a number of dimensions
(including skill, experience, level of risk aversion, access to information among others)
that are likely to be of value to employers.

Immigration may increase the returns to capital by altering the composition of a

nation’s factors of production. To appreciate this point, it is helpful to think about
how the mix of a country’s endowment of productive inputs referred to as factor
proportions affects the marginal productivity of each input. The higher the amount of
capital per worker, the more capital each employed person has to work with, which
translates into higher labour productivity. Conversely, with a higher ratio of labour to
capital, each unit of capital has more labour to work with, increasing the average

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productivity of capital. By increasing the ratio of labour to capital or, equivalently,
reducing the capital labour ratio, immigration makes the existing capital stock more
productive on a per-unit basis. This in turn increases the returns to capital in the
receiving nation and should spur net capital formation.

2.4 Immigration and the economy

Migration is a multidisciplinary phenomenon which to some extent affects every

sector of the economy, thus, in both growth and development dimensions.
Immigration is looked at from both the micro and macro-economic point of view,
starting with some microeconomics studies conducted on the subject

2.4.1 Immigration and choices

“The migration of workers is caused by differences in the supply of and demand for
labour in different locations” (A. Smith). Immigrant’s choices is one of the
microeconomic variables this paper looked at in terms of decision making prior to
their movement (or change in their place of usual residence) and this is categorised
into two dimensions;

a) Decision on migrating

People move to wherever their skill can be more productive. They must invest in their
migration which involves tangible and intangible costs (cost: of travel, of research for
job, of adaptation to a new environment)

The fundamental approach to individual migration decisions or choices is to assume

that each member of the population or migrant is rational (holding some factors
constant) and performs the following POCC (potential, opportunities, constrain and
challenges) analysis: at each point of time migratory choice has to be made between
remaining a resident of the country of origin or current region and moving to another
country or region. Each country, including the current place of residence, is perceived
as possessing a set of opportunities and constraints relevant to the estimation.

In addition, if the move were made, a set of costs would be incurred and by evaluating
each of the regions or countries as a disjunctive prospect in utility terms (thus,
evaluating each bundle of benefit and cost components by the particular agent making
the decision), and subtracting the cost of moving to it in utility terms, the subject

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forms a utility level for each hypothetical course of action (J. Rothenberg, 1976). If a
move to any new country yields an expected utility level greater than that associated
with remaining in the country of origin, the subject will become a migrant or an
immigrant. He or she will migrate to that region that promises the highest expected
utility level.

Considering benefit and cost dimension of the utility function for each hypothetical
move depends on the relevant information available to the individual, however,
leading to Pareto optimum in terms of human capital among others. This is because
information as well as it accessibility is never perfect, and its adequacy differs for
different potential moves. Examining information adequacy requires some
hypothetical assumption and criteria which perhaps can be influenced by
self-selectiveness of immigrant as a group.

Inferring from the above assertions, little has been done on the accuracy of
information accessed by immigrant; intangible utility derived by immigrant and the
effect of immigrant’s choices in terms opportunity cost are less considered due to data
and measurement deficit. This is one of the focuses the paper seeks to explore.

b) Immigrants and Income earnings

These studies argue that migrants make a rational decision by moving in the direction
where they are expected to get the highest benefits (Harris-Todaro, 1976). According
to Jerome R. (1976), the first notion on income of immigrants is it being a dependent
variable of a given region or country generated through employment, though this
given region does not represent either one particular job. Lifetime income expected to
be received by migrants is very imperative when making decisions regarding
migration. This is because the use of lifetime income perhaps can influence one’s
decision to migrate, discriminates different career profiles over time (considering skill
enhancement) and also gives the true forecast or impact of immigration on the
economy. (Jerome R., 1976 p.11).

Again, the real nature of income opportunity in two different places depends on the
expected time shape of earnings in both. Inferring from this, rational migration
estimation should certainly take these different time shapes into account.

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Some immigrants estimate net returns by taking the difference between expected
earnings in the country of destination and expected earnings in the country of origin.
That is, the subtraction of estimated costs of migration from expected earnings or
benefit leads to a measure of the expected gains in the country of destination taking
into consideration individual’s skills multiplied by the probability that individual gets
a job at destination

2.4.1.2 Immigrants and Risk diversity

Risk is a distinct quality of an entrepreneur which is considered as a factor of

production in microeconomics. The new economics theory of migration assumes that
people act, within households or families, to maximize expected income and to
minimize risks by diversifying the allocation of family labour (Stark and Taylor,
1989). They argued that the labour market “choice situation is one in which the
individual chooses among families of risk prospects (career trees) and then actively
and progressively narrows down choice within each family, unlike some risk prospect
relating choice situations where the immigrant simply selects among risk prospects
and then is passive while an intrinsically exogenous chance process determines the
outcome” (same point of view as Jerome R., 1976). For instance, If in a community
the income of affluent households increases whereas that of poor households remains
unchanged, the relative deprivation of the latter increases and their incentive to
participate in international migration also rises, perhaps, even if no change in
expected wages takes place.

2.4.1.3 Immigrants skills and productivity

According to Florence Jaumotte et al (2017), it came to light that both high and
low-skill migrants raise labour productivity. There is no significant evidence of major
physical or human capital dilution, as investment adjusts over time to the larger
consortium of workers, and migrants are increasingly high-skilled. They argued that
the complementarities that earlier analyses uncovered mostly at the micro level are
also relevant at the macro level. The evidence from the microeconomic literature
suggests that the positive productivity effects come from increased total factor
productivity and human capital. High-skilled migrants contribute to productivity
directly, including through innovation, and indirectly through their positive spillovers
on native workers. Low and medium-skilled migrants can also contribute to aggregate
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productivity, to the extent that their skills are complementary to those of natives,
promoting occupational reallocation and task specialisation. For instance;
 “Migrants can take jobs in sectors for which natives are in short supply, such as
in nursing, housekeeping, agriculture, and landscaping. Without immigrants,
natives would have to be incentivised to provide these indispensable services,
and the outcome would be lower supply at higher cost;
 When immigrants take up more labour-intensive routine jobs, natives move to
perform more complex tasks (associated with abstract and communication
skills), which promotes their skill upgrading (D’Amuri and Peri 2014);
 Nevertheless, there are complementarities between low-skilled migrants and
high-skilled native females. Empirical evidence reveals that, the availability of
childcare and household services rendered by low-skilled migrants through the
nanny effect has resulted in increase of highly skilled labour supply of natives
especially women (Cortés and Tessada 2011).”

2.4.2 Macroeconomic concepts and migratory influencing variables

The existence of wage differential across the space is the main cause of immigration
(Hicks 1932). He argued that as a result of that movements, the supply of labour
decreases and wages rise in the countries of origin, the supply of labour increases and
wages fall in the countries of destination, leading eventually to a new equilibrium. At
that point international migration ceases. International migration results from a
permanent demand of foreign labour that is inherent to the economic structure of
developed countries (Piore; theory of dual labour market, 1979). Below are some
considered variables that to somewhat influences the macroeconomy

a) Immigrants and GDP per capita

Identifying the effect of immigration on GDP per capita at the macroeconomic level is
difficult due to endogeneity issues. For instance, a positive correlation could reflect
the fact that high incomes in advanced economies attract migrants rather than
migrants contributing positively to GDP per capita. To address the risk of reverse
causality and other biases, Ortega and Peri (2014) and Alesina et al. (2016) suggest
and construct an instrumental variable for the aggregate migration share using a
gravity-type model and data on bilateral migration stocks. The model predicts
migration based solely on factors which are largely exogenous to the host economies’

37 | P a g e
income levels. These factors include ‘push’ factors, which capture economic and
political conditions in origin countries, as well as geography and culture-based costs
of migration between country of origin and host.

Migrants help increase per capita income levels in host advanced economies, and this
effect is both statistically and economically significant. Estimations according to IMF
(Jaumotte et al, 2017) suggest that one percentage point increase in the share of
migrants in the adult population (the average annual increase is 0.2% point) can raise
GDP per capita by up to 2% in the long run. Moreover, this effect comes mainly
through an increase in labour productivity and, to a lesser extent, through the more
standard channel of an increase in the ratio of working-age to total population. The
result survives a number of robustness checks, which include controlling for other
determinants of income per capita (trade openness, the level of technology, the
education level, and age structure of the host population, and policy variables);

According to Francesco et al (2016), burden that immigrants may place on public

finances is another popular argument that is used to oppose immigration, as social
security programs in host countries (and in Norway in particular) are more generous
than in immigrants’ countries of origin. They found that a positive immigration shock
lowered public expenditure in the short run, but increased it in the long run, perhaps
reflecting family reunifications. But fiscal revenues also increased, and so the net
effect on public finances was slightly positive in the short run, and neutral in the long
run. Different price measures included (according to Francesco et al, 2016) suggested
an expansionary immigration shock with no effect on domestic prices, but increased
in the Consumer Price Index (CPI) in the medium run through exchange rate
depreciation. Positive immigration shocks seemed to have expansionary effects on
key target variables for monetary policy, such as the unemployment rate and CPI
inflation.

b) Immigrants and trade

Immigrants may cut down the costs of exporting or importing services to and from
their country of origin by helping domestic firms overcome cultural and institutional
barriers with the foreign market (e.g., Gould 1994, Head and Ries 1998). Relative to
trade in goods, this cost reduction may be particularly important, since providing a

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service abroad often requires an understanding of cultural specificities that goes well
beyond what is required when selling a physical good abroad.

Similarly, Ottaviano et al 2013 suggests that immigrants may lessen or cutdown

imports of intermediates as they substitute for work that is otherwise performed by
workers in their home country and then imported. In other words, domestic firms may
be faced with the decision to hire a local immigrant worker from a particular country
or, instead, to ‘offshore’ that work to foreign workers in that country and import the
finished product. As a result, immigrants may also affect imports of intermediates
services. Immigrants foster creativity and help generate new ideas, and a
‘specialization effect’ (Peri and Sparber 2009), in which immigrants possess a
comparative advantage in performing certain production tasks, allowing for greater
division of labour within the firm.

In brief, there are economically important links between these phenomena, and this
implies that immigration policies may impact the export and offshoring activities of
services firms. Specifically, since trade in services requires the overcoming of cultural
and institutional barriers to a much greater extent than trade in goods, the duty of
immigrants in facilitating services trade may be critical and quantitatively more
relevant (holding some factors constant) than in facilitating tradable goods (Jaumotte
et al, 2017).

2.5 Immigration theories and conceptual economic framework

Ravenstein (1889) is one of the early proponents of migration studies. According to

his paper (Laws of Migration) which stood the test of time and remain the starting
point for work in migration theory, there are ten laws of migration but these are
categorised broadly into seven laws of migration as far as my study is concerned and
it includes the following

1. Migration and distance. "The great frame of migrants only proceed a short
distance" and "migrants counted in a certain center of absorption will grow less (as
distance from the center increases)" (pp. 198-199)

(b) "Migrants proceeding long distances generally go by preference to one of the great
centers of commerce and industry" (I, p. 199) and with most migrants being adults.

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2. Migration by stages. "There takes place subsequently a universal shifting or
displacement of the population, which produces 'currents of migration,' setting in the
direction of the great centers of commerce and industry which absorb the migrants" (I,
p.198).

(b) "The inhabitants of the country immediately surrounding a town of rapid growth
flock into it; the gaps thus left in the rural population are filled up by migrants from
more remote districts, until the attractive force of one of our rapidly growing cities
makes its influence felt, step by step, to the most remote corner of the kingdom" (I, p.
199). (c) "The process of dispersion is the inverse of that of absorption, and exhibits
similar features" (I, p. 199).

3. Stream and counter-stream; "Each main current of migration produces a

compensating counter-current" (I, p. 199). In modern terminology, stream and
counter-stream have been substituted for Ravenstein's current and counter-current.

4. Urban-rural differences in propensity to migrate; "The natives of towns are less

migratory than those of the rural parts of the country" (I, p. 199).

5. High proportion of females among short distance migrants; "Females appear to

predominate among short-journey migrants" (II,p. 288).

6. Technology and migration; "Does migration increase? He believed so. His

comparative analysis revealed that an increase in the means of locomotion and a
development of manufactures and commerce have led to an increase of migration" (II,
p. 288). In other words, migration increases with economic development.

7. Dominance of the economic motive. " Heavy taxation, domineering laws, an

unpleasant climate, unfriendly social surroundings, and even compulsion (slave trade,
transportation), all have produced and are still producing currents of migration, but
none of these currents can compare in capacity with that which arises from the desire
inherent in most men to 'enrich' themselves in material respects" (II, p. 286).

Parallel to these laws, there was an emergence of theories in order to broaden the
contextual scope of the (migratory) phenomenon. As cited by Arjan de Haan (2000),
economic approaches or theories of migration are centered on individual rational
behaviour, and emphasise on positive aspects of migration. Notable is Todaro’s (1969)
analysis of rural-urban migration. Push-pull models are an extension of this. These

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analyses anticipate that migrants act individually according to a rationality of
economic self-interest. On other school of thought, proponents under this theory who
argued from family and selectivity point of view assert that migration is the result of
rational choices made by individual or family”. For instance, if income inequality is
greater at place of destination, “people with higher than average skills have an
incentive to migrate because they can earn a higher relative wage in area of
destination” and if income inequality is greater at place of origin, such person have
less incentive to migrate than those with lower skill. On the contrary, this selectivity
effects is weakened taking into consideration marital status or married migrants
because some low-skilled spouse who would not have changed their usual place of
residence due to a high level of income inequality may do so if they are married to
skilled person. This principle of rationality is criticised by Douglas North (a noble
economist), though very relevant for the purpose of this study and thus holding some
factors constant. The decision to move to cities would however be influenced by wage
variation, plus expected probability of being employed at the destination. In the ‘new
economics of migration’, Stark (1991) extended the Todaro model, by emphasising
households rather than individuals as units of analyses, and remittances as an
inter-temporal contractual arrangement between the immigrant or migrant and the
family. Parallel to this, both internal and international migration resulted from a
permanent demand of foreign labour that is inherent to the economic structure of
developed countries. According to Piore (Dual labour market theory, 1979), several
factors contribute to create structural demand for foreign workers including status and
prestige gained through remuneration and remittances. This experience emerged as a
result of European labour importation during the late 1950s and 1960s through official
recruitment to aid it development revolutions
Marxism and structuralist theories focus on political and other institutions that
determine migration, and tend to emphasise the negative consequences. Authors like
McGee (1982), Standing (1985), Prothero and Chapman (1985), Breman (1985), and
Rubenstein for Mexico (1992), challenge the individualistic emphasis in the analyses
of Todaro and others. According to the above proponents, labour migration is seen as
inevitable in the transition to capitalism, and emphasise the advantages of migrant
labour for capitalist production, and the instrumentality of migration in capitalists’
control over labour. Migration is not a choice for poor or deprived people, but the
only surviving strategy after alienation from the land (de Haan A., 2000).

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Sociological and anthropological approaches or theories, including gender analyses
depict more complex images of migration. Current theories have emphasised that
analyses need to integrate both individual motives, institutions and the structural
factors in which the migrants operate, in the form of a ‘structuration theory’ (Chant
and Radcliffe 1992). The analysis builds in, e.g., an awareness of cultural
underpinnings, including about ‘destiny’, ‘myths of origin’, and ‘honour’.
Gender analysis has made a crucial contribution to understanding the institutions that
structure migration processes. Gender is seen as “an essential tool for unpicking the
migration process” (Wright 1995, Sinclair 1998). There is now more emphasis on
differential migration responses by men and women (themselves context dependent),
gender discrimination in returns to migrant labour, and the gendered nature for
motives of remitting, as determined by gender differentiated inheritance rules.
In the context of Europe
The first theory of European Union (House of Lords Committee, 2008) that mass
immigration curbs the issue of ‘pension time bomb,’ is however, misleading for
several considerable factors. First, the argument flouts the fact immigrant’s inevitable
ageing nature as well and will in time demand the same medical attention, social
welfare, and pensions in manner of the European population. Consequently, there
must be alternate ways in handling the challenge of ageing in a longer term. The
greatest significant of these solutions would be to extend the length of the active life
by increasing the retirement age. Ultimately, it’s an option to provide support for
young families in terms of housing and monetary incentive to encourage large
families with three or more children.
Again, rationalisation of the availability of higher education courses with the needs of
European labour should be looked at. This is critical, as it points to another factor
often overlooked by advocates of economic benefits of mass immigration. According
to United State National Academy of Science’s report (1997), constant returns to
scale, immigrants can affect rates of economic growth only to the extent that they
vary from the native-born in the long run. That is, to have an effect on growth rates,
this significant variation between immigrants and natives must persevere or continue
over each new generation because when these differences are bridged, then all that
immigration does is augment the population and the scale of the economy. Hence, it
does not change the rate of growth of income per capita.

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Alternatively, if the intake of high-skilled immigrants is not accompanied by
well-targeted policies that would regulate the higher education courses in accordance
with the demands of the market then immigration does not solve anything.
When this happens, the children of immigrants would simply have no advantage to
offer when compared to native workers, hence, mass immigration is of no
significance.
The second theory of the European Union states that mass immigration is beneficial
because in general, immigrants will pay more on taxes than they receive from the
public expenses. It can also be true for young and low-income temporary immigrants,
who pay on indirect taxes such as value added tax, but make little or no claims on the
welfare state due to their age and shortness of their stay.
However, the number of immigrants who bring economic benefits for the European
public is balanced out by those low-income and low-educated immigrants, normally
with families (who plan to stay indefinitely and heavily rely on the welfare state).
This called for a tremendous attention to the conceptual economic framework of
migrants. According to Nina Glick Schiller et al (1992), conceptual work needs to be
done to move from the perception that “something new is happening here” to the
development of a new conceptual framework within which to discuss contemporary
international migration. They argued that migrants forge and sustain multi-stranded
social relations that linked their societies of origin and settlement and this immigrant
experience is what is called “transnationalism” emphasizing on the emergence of a
social process in which migrants establish social fields that cross geographic, cultural,
and political borders. Immigrants are understood to be transmigrants when they
develop and maintain multiple relations (thus, familial, economic, social,
organizational, religious, and political) that span borders. This to some extent makes
the concept of migration a complex phenomenon and multiplicity of relations
considering the involvement of migrants. Kant’s idea of world citizenship and the
community "of all men" is unrealisable, but it is only because there are plenty of
states whose citizenship is not something that people want and there are also plenty of
other states, where many people want to live and whose citizenship is coveted by
many. This calls for (re)conceptualization of the essence of the migration.
According to Kapitsa et al (2001) in the sociological perspective, today’s migration
challenge is the pendulum-like process, wherein the perception does not coincide with
the expectations and all the considered variables (thus, the structure of society and the

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state, culture, ideology, religion) are unable to adapt to the new future quickly
enough.

2.5.1 Overview of the elements of the conceptual framework

The conceptual framework considered for analysing migration issues in the context
chosen is the Word system theory or conceptual framework. The “world” in
world-systems does not refer to global or planetary, instead a self-contained world
which apparently, no place is completely isolated. Inferring from Paul Eberts’ (2007)
system definition, there’s a degree of sufficient density of interaction that events in
one place in the system have important effects on other parts of the system such that
they shape its construction and change, and vice versa. According to Kohl (1987),
there are exceptions in ancient systems to some extent in a sense that it was often
sounder and more sensible to bring workers to the (raw) materials than the reverse.
This is because finished products are often lighter and cheaper and easier to transport
than raw materials.

World system theory depends mainly on the complex idea of globalization that the
world’s economy becoming more and more intertwined. This theory proposes that as
business flows across national borders, so will people. It links the determinants of
migration to structural change in world market and views migration as a function of
globalization, the increase interdependence of economies and the emergence of new
forms of production capital and Labour mobility are therefore interconnected and in
reality two sides of a coin, labour market changes may not only derive the immigrant
inflow but migration also has the capacity of affecting the labour market changes.

The expansion of export manufacturing and export agriculture linked strongly to

foreign direct investment flows from advanced economies to semi-developed or
emerging economies has led to a disruption in traditional work structures and has
mobilized new population segments into regional as well as long distance migration.

Capital mobility is hence a crucial factor for the world system while migration is a
natural outgrowth of the disruptions and dislocations that inevitably occur in capitalist

development and can be observed historically, the theory also brings in global
political and economic inequalities.

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World-system theory has been closely associated with Immanuel Wallerstein. He
aimed at achieving “a clear conceptual break with theories of ‘modernization’ and
thus provide a new theoretical paradigm to guide our investigations of the emergence
and development of capitalism, industrialism, and national states”. He aimed at
achieving “a clear conceptual break with theories of ‘modernization’ and thus provide
a new theoretical paradigm to guide our investigations of the emergence and
development of capitalism, industrialism, and national states”

From the start, Wallerstein argues, capitalism has had a division of labour that
encompassed several nation state. The capitalist world system began in Europe in
about 1500 and under the spur of the accumulation of capital, expanded over the next
few centuries to cover the entire globe. In the process of this expansion the capitalist
world system has absorbed mini-systems, world-empires, as well as competing world
economies. As summarised according to Muhammad Saud Kharal, Wallerstein
identified some key elements as far as this conceptual framework is concerned
namely;

a) Peripheral States

The peripheral areas are the least developed; they are exploited by the core for their
intensity (volume) and cheap labour, raw materials, agricultural production and are
normally found at urban fringes.

b) Semi Peripheral States

The semi-peripheral areas are somewhat intermediate, being both exploited by the
core and take some role in the exploitation of the peripheral areas. In the recent past,
these states are massively into expansion of manufacturing activities particularly in
products that the core nations no longer find very lucrative.

c) Core States

The core states are in geographically, technologically and economically advantaged

areas of the world (Europe and North America). These core states promote capital
accumulation internally through government purchasing, tax policy, financing
infrastructural development (such as sewers, roads, airports and all privately
constructed but publicly financed), sponsorship of research and development, and
maintaining social order to minimize class struggle

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Inferring from this framework, migration precede the dynamics of market creation
and structure of the global economy and its driven by a desire for higher profits and
greater wealth influencing owners and managers of capitalist firms in entering
economically marginalised countries on the periphery of the world economy in search
of land, raw materials, labour, and new consumer markets.

I agree with P. Nick Kardulias (2006) et al that inequality and exploitation is inherent
in world-systems since states were first developed. Certainly, the intensity, the
mechanisms, and even at times the directions of inequality and exploitation have
changed, but they have ever been part of state-based world systems and this
conceptual understanding is what informed the study.

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 1
Chapter Three

Data sources and Analysis

World’s population has grown tremendously rising nearly 150% from about 3 billion to
7.7 billion. As a result, the share of the world’s population living outside their countries
of birth has increased during the past 50 or so years. In 1960, 3.1% of the world’s
population did not live in their birth countries. This share of the world’s population
experienced insignificant percentage increase by 0.3% in 2015 constituting 3.4% share of
world’s population living outside their countries of birth. Nonetheless, the vast majority
(nearly 97%) of the world’s population has not moved across international borders despite
the fact that the absolute number of international migrants has grown considerably over
the past 50 years, from about 79 million in 1960 to nearly 250 million in 2015 (200%
increase but at an increasing rate inferring from the current world’s population). Parallel
to this, the absolute value for international migration in Europe from 2005 to 2010 stood
at 8.9 million with 8.7 million net migrants and it is in this light that this chapter seeks to
explore some data and analysis regarding the chosen study area. Figure 1 below shows
immigration by foreigners (country of birth) graph and it depicts the inflows of
immigrants as well as their pattern of flow

1
United Kingdom was not considered in this study due to the fact that some of the reasons that led to Brexit had
an element of immigration issues so considering the contextual scope of the study, this research is limited to some
selected few countries within the Union with the intent to negate inconsistent handling of migration crises as
perceived effect Brexit. According to DLM07, migration is defined according to (foreign by) country of birth
rather than (foreign) citizenship. Legislation regulating the acquisition of citizenship typically differs among
countries and within the same country over time (taking into consideration Anglo-Saxon countries and precisely
Italy). Thus, especially in a dataset featuring a long-time dimension, adopting the concept of citizenship instead of
country of birth might compromise both the cross-country and the within-country analyses of the size and
dynamics of immigration. For instance, country of birth concept is time-invariant, whereas foreign citizenship
changes with naturalization. However, foreign country of birth and foreign citizenship concept was applied in this
study where necessary.

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 Source: Eurostat [online, migr_imm4ctb], 2018; author’s construct
Germany recorded a tremendous influx of immigrants in 2015 with an increase of
621,121 immigrants from 2014 due to it immigration policies and other economy
benefits as a coping strategy for it demographic issues (see Figure 3.1). Belgium and
Norway experienced a slight stability in their inflows whereas France recorded a
consistent increase in its inflows. Whiles Italy had a consistent decrease in its inflows
from 2010 to 2014 with a slight increase in 2015 and 2016, Netherlands, Austria and
Sweden also experienced a slight fluctuation of their respective inflows due to
perhaps differential information access regard (opportunities), immigrant’s
preferences, among others. Considering sex dynamics of immigrants by country,
males were dominant throughout the selected years due to distance, nature of jobs and
labour required coupled with other sociocultural factors that influences migration.
With emphasis on 2016 inflows, Germany recorded 57% males to 43% females,
followed by Sweden (56% and 44% respectively), Italy (56% and 44% respectively),
Austria (54% and 46 respectively), Netherlands (53% and 47% respectively), Belgium
(52% and 48 respectively), France (49% and 51% respectively) and Spain (49% and
51% respectively). On one hand, the above inflow came as a result of individual
decision informed by the following three main reasons using immigrants in Italy as a
case study from 2010 to 2016;

2
Table 3.1: Reasons for annual inflow of Non-EU citizens to Italy

2010 % 2011 % 2012 % 2013 % 2014 % 2015 % 2016 %

Work 358870 60 124544 34 70892 27 84540 33 57040 30 21728 9 12873 6

Family 178797 30 140846 39 116891 44 105266 41 101422 41 107096 45.8 102351 45.1

Study 26343 4 31295 9 31005 12 27321 11 24477 10 23030 10 17130 8

Asylum
10336 2 42672 12 22916 9 19146 7 47873 19 67271 28 77927 34
granted

Elective
24221 4 22333 6 22264 8 19373 8 17511 7 19811 8 16653 7
residence

All items
598567 100 361690 100 263968 100 255646 100 248323 100 238936 100 226934 100
(Total)

2
This Immigration study ideally should consider both EU and Non-EU immigrants in Italy but due to data breaks
and unavailability, it emphasised on only the most accurate and reliable Non-EU immigrants data.

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Source: Immigrants.stat; and Author’s calculation, 2018
From table 1 above, the highest percentage share in 2010 inflows was workers who
constituting 60% of immigrants in Italy as at that time and decreased from 2011 to
2016. Immigrants whose migration was informed by studies increased from 2010 to
2012 and then decreased from 2013 to 2016. Italy recorded it highest inflow ever in
2013 and this was partly attributed to family reunification which experience increased
from 2010 (30%) to 2013 (41.2%), stabilised in 2014 and increased from 2015 (44.8%)
to 2016 (45.1%) and consistent increase in asylum seekers since 2014-2016 after it
fall (2011-2013).

3
On the other hand, the above reasons were recorded with emphasis on Non-EU
regular immigrants. Below is figure 2 depicting these regular immigrants’ countries of
birth and are residing in Italy;

Source: Immigrant.Stat, 2018; author’s construct

Aside other countries which constitute more than one country or nationals,
immigrants from China, Philippines, Sri Lanka, Brazil, Russia, United States and Peru
decreased with time whereas inflows Albania, Ukraine, Nigeria, Pakistan and Senegal
increased but at a fluctuating rate.

3
There are some differences between Figure 3.1 and Figure 3.2

Figure 3.1 considered 9 countries and country of birth of foreigners from all over world whereas Figure 3.2
specifically considered only Italy with emphasis on citizenship and Non-EU immigrants.

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In the context of the annual demographic balance however, Eurostat produces net
migration figures by taking the difference between total population change and
natural change; this concept is referred to as net migration plus statistical adjustment.
The statistics on 'net migration plus statistical adjustment' are therefore affected by all
the statistical inaccuracies in the two components of this equation, especially
population change. From one country to another 'net migration plus statistical
adjustment' may cover, besides the difference between inward and outward migration,
other changes observed in the population figures between 1st January in two
consecutive years which cannot be attributed to births, deaths, immigration and
emigration. Considering the study area, net migration ‘crude rate’ plus adjustment
was used in analysing the migratory demographic balance of the selected countries
4
and by context, crude rate of net migration plus adjustment was defined as the ratio
of net migration (including statistical adjustment) during the year to the average
population in that year. The value is expressed per 1000 persons. The net migration
plus adjustment is calculated as the difference between the total change and the
natural change of the population.

Source: Eurostat, 2018; author’s construct

4
According to Eurostat, crude rate of 'net migration plus statistical adjustment' is defined in context besides the
difference between immigration and emigration, as other changes observed in the population figures between two
referenced consecutive years which cannot be attributed to births, deaths, immigration and emigration. Italy
recorded the highest net crude rate plus statistical adjustment in 2013 as a result of favourable government policies
regarding the acceptance of immigrants (byzantine Italian appeals procedure coupled with the Dublin regulation);
instability in Libya coupled with weak security checks on emigrants from Libya by sea. Germany on the other
hand, experienced a tremendous increase in 2015 (Fig 3.3) which was largely attributed to the ongoing refugee
crisis (for instance Syria increased by 66,000 and Albania by 47,000 among others from the previous year’s (2014)
number);

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 Deducing from the graph (figure 3), the highest crude rate of net migration
considering other statistical adjustment was recorded by Italy in 2013 (19.7) followed
by Germany in 2015. Spain had a negative crude rate of net migration from 2012 to
2014 (-3, -5.4 and -2 respectively) due to increase in the country’s emigration coupled
with other statistical adjustment. Belgium and Spain had an increase of 2.1% and
1.6% respectively in 2017.

3.1 Immigration and social inclusion

Employment rate is seen as one of the main indicators used when analysing
immigration data since immigrants change their usual place of residence for higher
economic gains and freedom. How migrants are integrated into the economic system
is very important and dealing on such an issue demands that the active labour force
which forms the active population of immigrants and from the ages of 15 to 64 years
should be cautiously considered.

Table 3.2: Employment rate of foreigners between 15 to 64 years and by sex

2013 2014 2015 2016 2017

Femal Male
GEO Males Females Total Males es Total s Females Total Males Females Total Males Females

Belgium 72.7 62.3 67.7 72.4 63.0 67.6 72.2 63.0 67.6 72.3 62.9 68.0 72.8 63.2

Germany (until
1990 former
territory of the
FRG) 82.6 72.6 77.7 82.5 72.9 77.6 82.1 73.1 77.9 82.2 73.6 78.2 82.4 74.0

Spain 79.8 68.7 74.2 79.5 68.8 74.3 79.5 69.0 74.2 79.2 69.2 73.9 78.9 68.8

France
(metropolitan) 75.5 66.9 71.2 75.3 67.4 71.5 75.5 67.6 71.7 75.6 67.9 71.8 75.9 67.9

Italy 73.3 53.6 63.9 73.6 54.4 64.0 74.1 54.1 64.9 74.8 55.2 65.4 75.0 55.9

Netherlands 84.3 74.4 79.0 84.2 73.8 79.6 84.6 74.7 79.7 84.4 75.0 79.7 84.2 75.2

Austria 80.4 70.7 75.4 80.0 70.8 75.5 80.1 70.9 76.2 80.7 71.7 76.4 81.0 71.8

Sweden 83.3 78.8 81.5 83.6 79.3 81.7 83.5 79.9 82.1 83.9 80.2 82.5 84.3 80.7

Norway 80.2 76.0 78.0 80.1 75.9 78.2 80.3 76.1 78.0 80.1 75.9 77.3 79.3 75.2

Source: Eurostat [lfsi_emp_a], 2018; author’s construct

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From immigrant’s employment rates above, total employment rate for immigrants is
slightly stabilized throughout the selected countries, though, Sweden recorded the
highest rate followed by Netherlands, Germany and Norway with Italy been the
country that recorded the least rate throughout the plan period or the years
considered.

The question is how the increased employment of immigrants affected the

employment levels of natives and economy: Was there a displacement effect with
foreign-born crowding out natives from the labour market? Or did it generate an
increase in the demand for labour resulting in higher employment levels of natives?

In the neoclassical model as stated according to Rainer Münz et al (2007), there is no

effect on unemployment since perfect price flexibility and full employment of factors
are assumed. Under more realistic assumptions, common sense analysis is often based
on the concept of “a lump of jobs”, i.e. a fixed number of jobs in the immigrant
receiving country. If immigrants are employed then, by definition, some natives must
lose their jobs (i.e. substitution effect). However, if productivity increases due to the
more efficient allocation of labour, then the demand for resident labour increases. In
this case, at aggregate level the total number of jobs created by the presence of
immigrants offsets the displacement of natives, if favourable dynamic effects fully
unfold. Still, we must realise that even in the neutral case, there is a so-called
“churning effect”. This effect arises since native-born workers are displaced for a
certain period of time and only the long-run demand effects compensate this initial
job displacement.

Looking further into this variable or indicator suggest that sex dynamics and it
relational effect on age should be considered. Below is the graphical representation of
both males and female’s employment rate for foreigners in 2017

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Source: Eurostat [lfsi_emp_a], 2018; author’s construct

Inferring from the graph, this however can influence policies of labour organisation
since the differential employment rate by sex is attributed to nature of jobs,
5
recruitment structure and preferences, biological differences (productive time to be
precise “maternity leave” that are inevitably given to females) among others.

On one hand, immigrants to some extent are socially integrated into the economy
through legal recognition. This is one of the reasons why most immigration data
analysis is dominated by immigrants with the destination country’s residence permit
for the sake of data reliability and other accurate research elements. The table below
is an example of Non-EU regular immigrants with Italian (destination country)
residence permit by age and term of it validity for 2016 and 2017 respectively;

5
The table above depicts only Non-EU regular immigrants with little consideration on EU regular immigrants due
to data unavailability, reliability and accuracy. Again, it takes at least 5 years for an immigrant to merit EU long
term residence permit and since EU immigrants perhaps can only apply for short term residence permit that’s if
he/she will spend more than 90 days in the destination countries without visiting country of origin less than 3
months. A lot of emphasis was placed on Non-EU immigrants though the study was for immigration wholistically.

53 | P a g e
 Table 3.3: Residence permit of immigrants in Italy by age for 2016 and 2017

2016 2017

Short-term Long-term Short-term Long-term

Age class residence % residence % Total % residence % residence % Total
%
permit permit permit permit

until 17 285 637 7.27 666 809 16.96 952 446 24.23 257 545 6.93 556 356 14.98 813 901
21.91
years

18-24 years 206 961 5.26 150 654 3.83 357 615 9.09 207 942 5.6 142 354 3.83 350 296 9.43

25-29 years 220 329 5.6 144 404 3.67 364 733 9.28 197 327 5.31 143 877 3.87 341 204 9.19

30-34 years 230 649 5.87 200 503 5.1 431 152 10.97 206 808 5.57 201 215 5.42 408 023 10.99

35-39 years 190 539 4.85 257 198 6.54 447 737 11.39 168 598 4.54 253 522 6.83 422 120 11.37

40-44 years 141 612 3.6 250 302 6.37 391 914 9.97 127 276 3.43 252 438 6.79 379 714 10.22

45-49 years 103 930 2.64 216 594 5.51 320 524 8.15 92 934 2.5 218 375 5.88 311 309 8.38

50-54 years 74 826 1.9 167 648 4.2 242 474 6.17 68 303 1.84 175 182 4.72 243 485 6.55

55-59 years 53 561 1.36 121 308 3.09 174 869 4.45 48 512 1.31 128 600 3.46 177 112 4.77

60 years and 84 654 2.15 163 015 4.15 247 669 6.3 83 411 2.25 183 562 4.94 266 973
7.19
over

Total 1 592 698 40.51 2 338 435 59.49 3931 133 100 1 458 656 39.28 2 255 481 60.72 3 714 137 100

Source: Immigrants.Stat, 05 Sep 2018 06:33 UTC (GMT); author’s construct

Inferring from the table, immigrants with short-term residence permit (from 2016)
decreased by 1.23% in 2017 causing 1.23% increase of immigrants with long-term
Italian residence permit in 2017. Comparably, total immigrants within the age range
of 17 and below in 2017 decreased by 2.32% from the previous year, meaning, there
has been 2.32% increase in the active labour force of total immigrants with residence
permit holding other factors constant. It is assumed that immigrants with residence
permit are actively part of the working class (in the context of social inclusion) so the
percentage of 0.32% and 0.89% for 55-59 years and 60+ years respectively should
inform pension and social welfare schemes with emphasis on regulatory principles of
such sector of the economy.

On the other hand, educational integration (in terms bridging language barrier gap) of
foreigners was seen as one of the main social inclusive mechanism running through
the selected countries. The table 3.4 below depicts educational attainment of

54 | P a g e
 immigrants in Italy by sex (and percentage share as well as educational level of
immigrants from the selected countries with their respective age cohort in appendix)

Table 3.4: Educational attainment of immigrants in Italy by sex

2015 2016 2017

Level of Education
Males Females Total Males Females Total Males Females Total

Primary school certificate,

no educational degree 166 80 246 170 78 248 176 74 250

Lower secondary school

certificate 616 414 1,030 686 449 1,135 708 469 1,177

Upper and post secondary 609 594 1,203 564 576 1,141 536 533 1,069

Tertiary (university, doctoral

and specialization courses) 126 210 336 116 198 314 118 214 333

Total 1,518 1,297 2,815 1,537 1,301 2,838 1,538 1,291 2,829

Source: Immigrants.Stat, 05 Sep 2018 11:02 UTC (GMT); author’s construct

Deducing from the table 3.4, immigrants with upper and post-secondary educational
attainment had the highest percentage share of 40% and 42% for 2016 and 2017
respectively. Whilst males and female’s total percentage share of immigrant’s
educational attainment in Italy remained stabilised throughout the years (thus 54%
and 46% respectively from 2015-2017), male immigrants had the highest percentage
throughout the three levels of education considered for the analysis in Italy. The
research revealed that education was the only socially inclusive indicator that affect
all areas and sectors of the economy taken into consideration immigration and
economic prosperity wholistically. Meaning, mismanagement of such a force can
affect the economy negatively.

3.2 Immigration and Urbanisation

According to Eurostat Statistics on home ownership in 2016, nationals living in their

own dwelling units in the EU-28 constitute 70.6 %, while the remaining 29.4% lived
in rented dwelling units or apartment. Home ownership rates were much lower among
foreign citizens, in particular for non-EU citizens. Slightly more than one third

55 | P a g e
(34.0 %) of foreign EU citizens owned their own home (reliability is not hypothetical),
while this share fell to just above one quarter (26.8 %) among the population
composed of non-EU citizens. The home ownership rate for EU-28 nationals fell by
1.4% during the period 2010-2016, while there was a 5.1% reduction for non-EU
citizens and 10.1% for foreign EU citizens (though with more than 5% margin of
error in terms of reliability).

Concentration of dwelling units and housing cost overburden resulting from influx of
immigrants in country destination countries affects (direct or indirectly) diverse
sectors of the economy. On one hand, overcrowding rate (which is estimated by using
crowding index) is often closely linked to other social exclusion, marginalisation and
deprivation indicators, in particular those related to earnings (income). Foreign
citizens and Non-EU immigrants were more likely to live in
an overcrowded household due to some sociocultural factors that to some extent
influences settlement development. Below is figure 3.5 depicting overcrowding rate
of Non-EU citizens by broad age cohort (18 and over);

Source: Eurostat (ilc_lvho15), 2018

EU-28 (current composition) nationals between age range of 18+ in 2016 recorded
17.6% overcrowding rate whiles the overcrowding rate for Non-EU immigrants was

56 | P a g e
25.6% with 0.8% increased from 2015 rate (see Fig. 3.5). This means that foreign
citizens (and in particular those from non-member countries) were more likely to live
in an overcrowded household. Comparing overcrowding rate among countries despite
their socio-economic orientation and resource endowment differences, Italy recorded
the highest overcrowding rate of 49.6% (at a significant decrease of 1.4% from 2015)
followed by Austria (40%) with 3% increase from 2015. Netherlands recorded its
highest rate since 2010 at 7.3% in 2016 though shown as the country with the least
rate when cross-sectional analysis by countries are considered with emphasis on
Non-EU immigrants within the 18+ age cohort.

Again, detailed analysis was conducted with the aim of understanding the relationship
between age dynamics and overcrowding rate by country of birth as shown in the
table below;

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Table 3.5: Overcrowding rate, by citizenship and by age, 2016 (%)

of which:
Nationals Foreign citizens
EU citizens (except reporting
Non-EU citizens
country)

of which: of which: of which: of which:

20-64 20-64 20-64 20-64
years years years years
25-54 years 55-64 years 25-54 years 55-64 years 25-54 years 55-64 years 25-54 years 55-64 years

EU-28 16.3 17.2 9.7 26.7 26.8 18.2 19.0 19.8 8.4 33.1 32.3 :

Belgium 2.3 2.5 0.8 12.0 11.3 8.8 9.6 9.4 6.9 16.1 13.9 17.4

Germany 7.0 7.3 3.6 22.4 21.3 13.8 17.9 16.5 9.0 28.1 27.1 24.1

Spain 4.6 4.7 2.8 12.9 11.7 8.9 6.3 5.2 2.5 16.6 15.3 14.7

France 6.4 6.7 2.4 24.2 25.6 15.4 10.8 12.4 4.8 32.1 32.5 26.9

Italy 27.5 28.8 17.4 49.6 49.6 36.9 43.3 44.6 21.3 52.4 51.9 43.3

Netherlands 4.3 3.5 1.1 7.5 8.4 0.7 5.6 6.5 0.9 9.8 10.3 :

Austria 10.0 10.4 5.4 40.0 37.2 36.8 23.4 22.0 25.2 51.5 49.1 43.0

Sweden 13.8 13.4 5.0 38.3 38.9 15.5 20.5 22.7 2.5 48.6 47.4 39.3

Source: Eurostat (online data code: ilc_lvho15)

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The share of foreign citizens living in overcrowded households was generally much
higher than the corresponding share among nationals. The developments for the
overcrowding rate among non-EU citizens per country followed a similar pattern to
that for foreign EU citizens although at a higher level. The table is very important
since it can inform health, housing, demographic and labour policies for a better
economic growth and better immigration management through equitable and
all-inclusive global development.

On the other hand, how immigrants cope with housing rent, maintenance and
commuting cost (which are all attributable to the overcrowding index) became an
issue of concern categorising the analysis according to two broad age cohort (18+ and
20-64 age groups). The diagram below shows housing cost overburden rate of foreign
citizens taken into consideration their disposable income, willingness to pay and
active workers in a household.

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Source: Eurostat (ilc_lvho25), 2018

From the graphical representation of immigrants or foreigner’s housing cost

overburden rate, Spain emerged as the country with highest rate (36.3% for 18+ age
range) in 2016 at a decreasing rate of 1.3% with inference to 2015 followed by
Netherlands and Italy (Figure 3.6). Foreigners in France experienced an increase in
2016 in the cost of their dwelling units but comparably had the least recorded rate
among the selected countries in 2016. Housing cost overburden rate in 2016 for
foreigners in EU (current composition) nationals decreased by 0.7% from 2015 and in
similar pattern, Germany, Sweden, Norway and Belgium also decreased in 2016.

Housing cost overburden rate was also looked at by comparing broader age cohort
(20-64 years) between EU nationals, foreign citizens and Non-EU citizens by country
of birth in 2016 as shown in the table below

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Table 3.6: Housing cost overburden rate by citizenship and by age, 2016 (%)
of which:
Nationals Foreign citizens
EU citizens (except reporting country) Non-EU citizens

20-64 of which: 20-64 of which: 20-64 of which: 20-64 of which:

years 25-54 years 55-64 years years 25-54 years 55-64 years years 25-54 years 55-64 years years 25-54 years 55-64years

EU-28 10.7 10.1 10.7 25.4 25.4 23 22 21.4 19.4 28.2 28.6 .

Belgium 8.3 8 9.2 23.4 21.6 25.6 16.9 13.1 25.8 34.3 34.3 25

Germany 15.2 11.4 18.8 17.6 17.3 22.1 16.9 15.7 21 18.5 19.3 24.5

39.2 39.0
Spain 8.3 8.7 6.6 37.3 39 30.1 34.2 36.9 19.4 39.6
40.2

France 5.9 5.8 3.8 10.8 9.5 123 10.1 10.1 9.9 11.2 9.2 14.9

Italy 8.3 8.4 8.2 28.5 29.4 26.4 30.3 31.5 22.8 27.7 28.4 27.8

Netherlands 11.2 8.8 123 30.3 31.7 18.6 21 21.4 13.8 41.9 42.9

Austria 6 5.6 4.4 18.9 16.2 26.2 20.1 15.3 36.8 18.1 17 20.5

Sweden 6.7 5.6 5.1 20.6 19.3 21.6 21.9 18.6 28.6 19.9 19.6 8.9

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Source: Eurostat (online data code: ilc_lvho25)

According Eurostat, “housing cost overburden rate for nationals living in the EU-28
fluctuated around 10 % during the period 2010-2016, with a low of 9.8 % in 2010
and a relative high of 11.1 % in 2014. In 2016, just over 1 in 10 nationals (10.7 %)
living in the EU-28 spent more than 40 % of their disposable income on housing; note
that changes in this rate may reflect changes in disposable income and/or changes in
the cost of housing

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It is evident that housing cost overburden rate for Non-EU citizens is higher that of
EU citizens and respective Nationals. The gap in-between Nationals and that of
Non-EU citizens perhaps draws attention to what is actually happening as far as the
above indicator is concern in relation to other areas of the economy se property rate
and the housing market (not hypothetical).

By contrast, a much higher proportion of foreign citizens were overburdened by

housing costs, as the rate stood at 22.0 % for foreign EU citizens (low reliability) and
was even higher among non-EU citizens, reaching 28.2 %.” This to some extent can
influence household decisions regarding savings and investment as well as circulation
of money in the respective country’s economy taken into consideration the banking
sector and system. Below is figure 3.7 which depicts 2016 spread of average housing
cost overburden rate for the selected countries and by citizenship

Source: Eurostat (online data code: ilc_lvho25)

63 | P a g e
3.3 Immigration and competition

Many European studies show that immigration plays an important role in improving
labour market efficiency. All sectors with jobs avoided by natives, e.g. dirty, difficult
and dangerous jobs, low-paid household service jobs, low-skilled jobs in the informal
sector of the economy, jobs in sectors with strong seasonal fluctuations, e.g. farming,
road repairs and construction, hotel, restaurant and other tourism-related services,
heavily depend on the labour supply of immigrants. In their absence, these sectors
would probably face severe shortages of labour or labour costs would sharply
increase.

Plate 3.1: Map for Labour Market analysis from 2016 employment rate

Source: Eurostat (online data code: lfsi_emp_a), 2016

64 | P a g e
Competition in the labour market differs by country and it’s clearly shown on the map.
Due to the community preference principle proposed by the Deutsch, there is the
likelihood of experiencing competitive advantage in the labour market as far as low
skilled immigrants are concerned coupled with ageing nationals in the active working
force as well as the rising demand for household and care services. There are labour
market allocative inefficiencies in some countries (for instance Italy and Spain)
resulting from high demand for highly skilled immigrants or qualification mismatch
which perhaps causes rise in the competition for labour due to high taxes for
manufacturing and textiles companies resulting in relocation of some highly labour
intensive industries as well as (to the extreme) the negative effect of merger and
acquisition of telecommunication companies.

Low mobility of domestic or native labour force resulting from considerable

differences in wages, incentives and unemployment perhaps causes demand for
foreigner’s labour to rise since they are willing to move to areas of high employment
opportunities, high wages and low unemployment which indirectly complement the
labour demand of natives who are reluctant to move (in the short-run).

Furthermore, the native workers, who lose their jobs, may not be employed later, as
some of them have different skill levels than the ones required for the newly created
jobs. Thus, the displaced workers will need to be retrained, which in turn generates
costs to the treasury or to their household budget and/or additional demand for
migrant labour.

3.4 Immigration and Unemployment6

An unemployed person is defined by Eurostat, according to the guidelines of

the International Labour Organization, as someone aged 15 to 74 ( though 16 to 74
years in Italy, Spain, Norway); without work during the reference week; available to
start work within the next two weeks (or has already found a job to start within the
next three months); and actively having sought employment at some time during the
last four weeks. It is assumed the age of the active labour force is best utilised within
20-64 years considering late years of schooling, pension among others. The table

6
Despite data breaks on some considered obstacles to getting suitable job by people with migration status in 2014,
table 11 (at appendix) gives percentage share of these obstacles including lack of language skill, citizenship of
residence permit, origin/religion or social background, no barrier, other barriers, and people with no response

65 | P a g e
 shows unemployment rate of immigrants by country of birth and between the age
ranges of 20-64 years.

Table 3.7: Unemployment rates by sex, age and country of birth (%)

Non-EU country of birth (20 to 64

EU country of birth (20 to 64 years) years)

Countries 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017

European Union
(current
composition) 12.8 13.1 12.4 11.1 9.8 7.5 19.1 20.0 18.6 17.6 16.2 13.3

Belgium 9.6 10.1 10.4 10.3 8.5 8.8 22.3 22.8 23.4 22.5 21.2 17.0

Germany (until
1990 former
territory of the
FRG) : : : : : 4.1 : : : : : 7.8

Spain 29.1 29.5 28.6 24.3 21.7 19.1 35.6 37.2 34.6 31.2 27.2 24.5

France 8.3 7.4 9.3 10.4 9.6 7.9 17.1 19.1 18.9 19.4 18.8 17.7

Italy 12.6 15.2 15.4 14.6 13.9 13.2 13.6 16.6 16.3 15.7 14.9 14.2

Netherlands 6.9 7.6 7.8 8.3 6.2 4.7 12.0 14.7 14.1 13.1 11.9 10.1

Austria 6.3 7.4 7.8 8.1 7.7 6.7 10.4 11.3 11.8 12.5 13.9 13.4

Sweden 7.4 7.8 8.6 7.6 6.5 6.0 18.6 19.0 18.3 18.5 18.2 17.6

Norway 4.3 4.9 5.7 7.1 6.5 6.0 8.5 9.6 9.9 12.8 11.4 10.8

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Source: Eurostat [lfsa_urgacob], 2018; author’s construct
Inferring from the table above, there has been a consistent decrease in unemployment
rate of Non-EU immigrants between the age range of 20-64 years with emphasis on
countries like Belgium, Spain, Italy, and Netherlands from 2013-2017 despite the fact
that Spain recorded the highest rates throughout the number of years considered.
Contrarily, Austria has its highest rate in 2016 and has been experiencing increased
(Non-EU immigrants) unemployment rate since 2012 to 2016 with 0.5% decrease in
2017. Sweden on the one hand has been the only country (as far as the selected
countries are concerned) with a slight stability in its unemployment rate from 2014 to
2016 whereas Norway on the other hand is seen to be the country with the least
recorded unemployment rate. All the selected countries had a decline in the rate of
unemployed Non-EU immigrants in 2017 with reference to 2016 rate. Albeit,
increased by an increasing rate of 8.2%, 3.7%, 5.4%, 9.8%, 1.0%, 5.3%, 6.7%, 11.6%
and 4.8% respectively when compared with 2017 immigrants that were born in EU
countries. The following table also depicts Non-EU immigrants by sex from the age
cohort of 20 to 64 years who are unemployed

Table 3.8: Unemployment rate for Non-EU Migrants by sex and age
Males from 20 to 64 years Females from 20 to 64 years

Countries 2014 2015 2016 2017 2014 2015 2016 2017

European Union
(current
composition) 18.1 17.0 15.1 12.5 19.2 18.4 17.7 14.2

Belgium 24.3 23.3 21.0 16.2 22.1 21.5 21.4 18.0

Germany (until
1990 former
territory of the
FRG) : : : 9.0 : : : 6.1

Spain 36.1 31.6 26.1 23.7 33.0 30.9 28.3 25.3

France 19.0 20.0 18.2 16.7 18.8 18.8 19.4 18.9

Italy 15.3 14.2 12.8 12.3 17.7 17.9 17.9 16.9

Netherlands 13.8 12.1 10.7 9.3 14.5 14.3 13.2 11.1

Austria 12.1 13.0 15.1 13.6 11.4 12.0 12.5 13.1

Sweden 17.9 18.6 18.9 17.7 18.7 18.3 17.5 17.4

Norway 9.4 12.5 11.5 11.3 10.5 13.0 11.3 10.3

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Source: Eurostat [lfsa_urgacob], 2018; author’s construct
From the above table, Belgium had more unemployed females in 2017 than males
with a difference of 1.8%. Despite the fact that both males and females who are
Non-EU immigrants (thus by country of birth) experienced a decrease rate in each
country’s rate when compared to the previous year (2016), Germany recorded 2.9% of
more males than females in 2017. Italy, Netherlands and Norway as indicated per the
table shows more females than males in 2015. The table above is essential in
unemployment dynamics and labour market integration studies by sex and age.

Due to breaks in data, this paper sought to look at the graphical representation of both
male and female immigrants as well as the country of birth in a broader regional
context considering EU and Non-EU origins of immigrants in 2017

Source: Author’s construct, 2018

A quick glance at the graph above shows that, unemployment rate of Non-EU
immigrants is higher than immigrants born in EU countries in 2017. For instance,
Sweden recorded 11.6% rate of unemployment of Non-EU immigrants above or
higher than immigrants born in EU countries. The highest unemployment rate
recorded for both males and females was in Spain with the rate of 23.7% and 25.3%
respectively. Comparably, Italy experienced the widest rate gap of 4.6% between

68 | P a g e
unemployed males and females, meaning, Non-EU immigrants who are females
(20-64 years and are actively searching for jobs but couldn’t find one) were 4.6%
higher than the males with emphasis on the informal nature of jobs, skills among
others.

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 Chapter Four

Immigration effect on Demography and the Economy, the case of Germany

Cobb-Douglas relationship provides that, a way of looking at economic growth or

change in economic output is related to the change in capital stock, change in labour
stock, and change in the state of technology. The demographic problem that lies on
the horizon is an increasing number of retirees who, while no longer in the workforce,
are nonetheless expected to live longer lives. Unfortunately, the number of new births
seems to be too low to replace those retirees in the workforce, hence, this study was
skewed in terms of countries in Western Europe in order to find out what is happening
to demographics and the economy as immigration increases using Germany as a
referenced country. Below are some demographic issues looked at by this paper;

4.1 Immigration and fertility

The unprecedented increase in population growth during the Post-Malthusian Regime

has been ultimately reversed, bringing about significant reductions in fertility and
population growth in various regions of the world. This reduction in fertility permitted
the reallocation of resources from the quantity of children toward their quality
enhancing human capital formation and labour productivity (see Becker, 2009). The
decline in total fertility rates also affected the age distribution of the population
temporarily, increasing the fraction of the labour force in the population and thus
mechanically increasing productivity per capita.

According to Maddison (2001), simultaneity of the demographic transition across

Western European countries that differed significantly in their incomes per capita
suggests that the high levels of income reached by these countries in the
Post-Malthusian Regime played a very limited role as suggested by Beckerian theory
of demographic transition. In particular, educational attainment has been negatively
associated with fertility, accounting for income per worker and mortality rates (Murtin,
2009). Importantly, cross-sectional evidence from France and Germany supports the
hypothesis that the rise in human capital formation has had an adverse effect on
fertility.

Finally, suggested evidence by Becker et al. (2009) states that Malthusian model
missed the connection with increasing income, more and more emphasis will be

70 | P a g e
placed on child’s quality7. The child Quantity-Quality model of trade‐off between
fertility and education is generally described as the choice between the quantity of
children and the quality of human capital invested in each child. Becker showed that
the proposed model is closely related to income, prices as well as tastes (Becker,
Cinnirella, Woessmann 2009). Inferring from their model, this paper seeks to describe
the trend of fertility rate in Germany and the rationale behind it.

Plate 4.1: Trend of total fertility rate and immigration in Germany (1970-2016)

Source: Countryeconomy.com (2018); Author’s construct (with Eviews), 2018

7
Becker’s et al optimal level of investment in child quality increases if:

1. The technological environment changes more rapidly (i.e., ∂e(g, β, τe, τq)/∂g > 0);

2. Preferences for child quality are higher (i.e., ∂e(g, β, τe, τq)/∂β > 0);

3. The cost of raising a child (regardless of quality) increases (i.e., ∂e(g, β, τe, τq)/∂τq > 0); or The cost of
educating a child decreases (i.e., ∂e(g, β, τe, τq)/∂τe < 0).

Similarly, the optimal number of children declines if:

1. The technological environment changes more rapidly (i.e., ∂n/∂g < 0);

2. Preferences for child quality are higher (i.e., ∂n/∂β < 0);

3. The cost of raising a child (regardless of quality) increases (i.e., ∂n/∂τq < 0); or

The cost of educating a child increases and the elasticity of child quality with respect to the cost of child quality is
smaller than one in absolute value (i.e., ∂n/∂τe < 0 if [∂e/∂τe][τe/e] > –1)

71 | P a g e
Inferring from plate 4.1, the left scale shows the immigration flows whereas that of
the right is for fertility rate. This is because the paper was interested in knowing the
volume trend of inflows and the growth trend of total fertility for the considered
periods. As shown, the increase in 1950-1960 total fertility rate perhaps had an
influence on the value of 1970 fertility growth rate recorded but there was a decline of
0.11 from 1970 to 1971 and then a sharp decrease of 0.38 from 1971 to 1973 partly
due to the tertiary revolution. Fertility rate stabilised in 1997-2004 though there was a
consistent increase in female participation rate in terms of employment (from
1960-2007) meaning the rise of the relative wage of female workers would lead to a
reduction in the size of the family, which would imply that child upbringing activities
and female labour supply would substitute each other (Galor 2005). An increase in
fertility rate (0.23 or 23%) was recorded from 2006-2016 due to access to credit
market, favourable maternity and large family size inducing policies coupled
immigration integration policies and reforms8.

Immigrant fertility has direct implications for the labour market involvement of the
first generation, and - due to tradeoffs between the demand for child quantity and
child quality - indirect effects on the human capital of second generation immigrants,
hence, brief consideration of immigration and fertility theoretical perspectives by this
paper. These theories of migration and fertility differ in several respects, the main
difference being in the relationship between the timing of migration and changes in
the reproductive attitudes and behaviours of migrants. Four theoretical perspectives
emanating the relationship between immigration and total fertility can be categorised
into Generational (socialization) perspective, adaptation (assimilation) perspective,
selectivity perspective and disruptive perspective and as seen briefly considered
below;

The socialization hypothesis predicts that the change in total fertility of immigrants is
insignificant compared to that of their respective country of origin, irrespective of
their duration of stay in the receiving or host country. Further, generational hypothesis
emphasize that culture, norms and values of place of origin continue to prevail even
after migrating to a new low fertility setting. However, this paper beg to state that

8
According to Pelling et al (1991), cross-sectional evidence shows that in the pre-demographic transition epoch
affluent individuals, who presumably had better access to credit markets, had a larger number of surviving
offspring.

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fertility outcomes of total duration of stay doesn’t affect the number of births but the
duration of stay in the receiving country which occurs during a woman's reproductive
phase9 (as consistent with Mayer et al, 1999).

The selection hypothesis on one hand suggests that the lower fertility among
immigrants compared to that of native can be accounted for primarily by selection of
the migration process, that is, migrants are self-selected and represent
a non-random sample in regard to their life cycle and socio-economic characteristics
such as income, occupation, marital status, age, education, aspirations among others.

Goldstein and Goldstein (1982) maintain that early in the modernization process
migrants are likely to have lower fertility than natives in urban areas, but as migration
becomes massive, later migrants tend to have higher fertility compared to women in
urban areas. If migration is selective of low fertility women, then it follows that
before migration, migrants will have had fewer children compared to non-migrants of
similar age, in similar places of residence and with similar background characteristics
in the country of origin. Relative to immigrant’s country of origin, self-selected
migrants are more prone to undertake long-term (e.g. human-capital) investments and
to have low fertility rates. Blau (1992) shows that immigrant women are among the
best educated in their native countries, which indicates high opportunity costs of child
bearing.

On the other hand, disruption hypothesis stresses the fact that migration perhaps tends
to reduce fertility. The hypothesis maintains that migration may disrupt fertility in
several ways including separation of spouses, stressful migratory process to some
extent can actually interfere with physiological capacity to gestate, coupled with other
(socio-economic) factors and policies may perhaps lead to a reduction in fertility of
new migrants. The disruptive hypothesis suggests that fertility reduction attributable
to disruption is expected to be only temporary, and a more normal or even somewhat
accelerated pace of fertility is expected to be resumed gradually. It also implies that
recent migrants will have lower fertility compared to natives at place of destination
for the period immediately following and possibly preceding migration.

9
Immigrant women who spent between one and five years of their fertile period in Germany had an average birth
of 3.22; those who spent almost all their fertile time in Germany had an average birth of 2.33 births which is
somehow close to the native average birth of 1.93 (see GSOEP, 1996)

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Lastly, the assimilation model of fertility takes the premise that changes in tastes and
adoption of native fertility size or norms by immigrants occur gradually by time at
destination among the families of migrants themselves and do not require an entire
generation to pass before they take place. The hypothesis does not specify how long it
will take for immigrants to adapt to small family norms in the destination country.
The adaptation or assimilation hypothesis implies that immigrants will have higher
fertility compared to natives, after controlling age and other demographic
and socioeconomic characteristics. It also implies that post-migration fertility of
long-term immigrants and natives will be similar10. The hypothesis deduced from the
study conforms to that of Mayer et al (1999) which states that;

H1: The higher a woman's (potential) labour market income, the lower her completed
fertility.

H2: The assimilation hypothesis suggests that immigrants' completed fertility exceeds
that of natives and that it falls with the number of fertile years spent in Germany.

H3: The disruption hypothesis with catch-up suggests that immigrants' completed
fertility does not vary over the number of fertile years spent in Germany.

H4: The disruption hypothesis without catch-up suggests that immigrants' completed
fertility takes on a U-shaped form over the number of fertile years spent in Germany.

H5: Country of origin fertility differences are reflected in immigrant fertility.

As cited by Majelantle et al. (2013), empirical evidence shows that there is substantial
evidence of partial but not complete adaptation for most migrant groups once the
disruption effect disappears; there is little support for the strong selectivity hypothesis;
and these evidence quite strongly suggests the presence of a significant disruption
effect when considering migration and fertility (see Hervitz, 1985). On the contrary,
other authors like Ribe and Schultz, 1980 have upheld the selectivity hypothesis and
concluded that the adaptation hypothesis is not much more successful than the

10
Two key differences between disruptive and assimilation or adaptation fertility effect are; first, they differ with
respect to the direction of short-term fertility adjustment (see Mayer et al, 1999). The adaptation model considers a
slow decline in fertility and the disruption model expects an increase in fertility after the disruptive migration event.
Second, the migration effect on completed fertility may differ in the two scenarios: Since in the assimilation
framework migrants generally have above native level fertility until assimilation is completed, they will have
higher levels of completed fertility. This "excess fertility" beyond the native level should decline the more of its
fertile years a couple spent in the receiving country

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selectivity hypothesis in accounting for migrant/non-migrant fertility differences, and
the generational hypothesis was not supported by the available data. Their study again
concludes that migrants have distinctive unobserved preferences for family size, quite
in addition to other differentiating characteristics, such that it is fertility propensities,
which determine choice of destination areas, rather than the chosen area, which
determines fertility behaviour. However, the study by Kulu (2005) strongly supports
the adaptation hypothesis and no evidence on the selectivity hypothesis among the
internal migrants’ fertility of post war Estonian female cohorts. In international
migration context, Gabrielli et al. (2007) study in Italy considering the hypotheses of
socialization, adaptation and selection controlling various compositional factors found
an evidence for selection and socialization hypothesis and no evidence for adaptation.
The evidence on the disruption hypothesis is only few in the European context.

Milewski (2010) on the other hand compared fertility of immigrants in Germany with
the citizens and he concluded that fertility of immigrants was higher immediately after
the migration supporting selection hypothesis. When controlled for socio-economic
factors, there is difference between the fertility of second generation migrants and the
locals supporting the adaptation and socialization hypothesis (see Federal Statistical
Office, Wiesbaden 2018 as presented in Appendix). An extensive review on the study
of Western, Northern and Southern Europe, concluded that immigrants normally have
higher levels of period fertility than the ‘native’ populations (see Sobotka, 2008).
Moreover, the differentials in fertility vary by country of origin indicating
the heterogeneity in immigrants’ fertility

Inferring from Federal Statistical Office (2018) data, the results indicate that
immigrants move into Germany with total fertility rates above native levels and that
their completed fertility declines in relation to fertile years spent in Germany and then
disrupt without catch-up which implies that immigrants' completed fertility takes on a
U-shaped form over the number of fertile years spent in Germany, however, this
assertion was based annual total fertility trend due to difficulties relating data issues.
This finding corresponds to the predictions of hypothesis H2 and H4. We reject the
hypothesis that immigrant fertility follows a disruption model with complete catch-up
H3. However, this paper perhaps agrees with the prediction of the standard economic
model regarding the negative opportunity cost effect of female human capital on total
fertility outcomes (H1) found by Mayer et al (1999) as well as Milewski’s (2010)

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findings on statistical significant differences in immigrant fertility assimilation by
country of origin (H5). In conclusion, migrant’s human capital plays a tremendous
role in the future not only in changing population size and structure but it also has a
relative impact on the macro economy such as GDP growth, unemployment,
employment, wages, and labour market at the destination countries. Therefore,
understanding the patterns of relationship between migration and fertility will go a
long way in formulating macroeconomic policy.

4.1.1 Recent evolution of immigrants in Germany

Change in immigrant’s population is very important since it goes beyond just

counting difference but rather help in explaining the magnitude of effect exerted by
international migration on the economy. Relying on how immigration and ageing
population could affect regional competitiveness, this paper seeks to draw attention to
the percentage change in immigrant’s population and how it has evolved over the
years. The table below to some extent serves as the reference point for remittance
analysis, immigration policy formulation and other economic growth analysis.

Table 4.1: Arrivals, departures and net migration in Germany (1965-2017)

Net Migration (surplus or Immigration change in

Year Arrivals, Departures, % change
deficit ) absolute value

2017 1,550,721 1,134,641 416,080 -314,401 -20

2016 1,865,122 1,365,178 499,944 -271,832 -15
2015 2,136,954 997,552 1,139,402 672,230 31
2014 1,464,724 914,241 550,483 238,231 16
2013 1,226,493 797,886 428,607 145,557 12
2012 1,080,936 711,991 368,945 122,637 11
2011 958,299 678,969 279,330 160,017 17
2010 798,282 670,605 127,677 77,268 10
2009 721,014 733,796 -12,782 38,868 5
2008 682,146 737,889 -55,743 1,380 0
2007 680,766 636,854 43,912 18,911 3
2006 661,855 639,064 22,791 -45,497 -7
2005 707,352 628,399 78,953 -72,823 -10
2004 780,175 697,632 82,543 11,200 1
2003 768,975 626,330 142,645 -73,568 -10
2002 842,543 623,255 219,288 -36,674 -4
2001 879,217 606,494 272,723 38,059 4

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2000 841,158 674,038 167,120 -32,865 -4
1999 874,023 672,048 201,975 71,567 8
1998 802,456 755,358 47,098 -38,177 -5
1997 840,633 746,969 93,664 -119,058 -14
1996 959,691 677,494 282,197 -136,357 -14
1995 1,096,048 698,113 397,935 13,495 1
1994 1,082,553 767,555 314,998 -194,855 -18
1993 1,277,408 815,312 462,096 -224,790 -18
1992 1,502,198 720,127 782,071 303,220 20
1991 1,198,978 596,455 602,523 -57,272 -5
1990 1,256,250 574,378 681,872 122,456 10
1989 1,133,794 539,832 593,962 273,216 24
1988 860,578 419,439 441,139 268,813 31
1987 591,765 398,518 193,247 24,550 4
1986 567,215 407,139 160,076 86,343 15
1985 480,872 425,313 55,559 70,485 15
1984 410,387 604,832 -194,445 55,891 14
1983 354,496 487,268 -132,772 -49,523 -14
1982 404,019 493,495 -89,476 -201,610 -50
1981 605,629 470,525 135,104 -130,733 -22
1980 736,362 439,571 296,791 86,530 12
1979 649,832 419,091 230,741 90,212 14
1978 559,620 458,769 100,851 37,009 7
1977 522,611 505,696 16,915 46,325 9
1976 476,286 569,133 -92,847 47,222 10
1975 429,064 652,966 -223,902 -171,949 -40
1974 601,013 635,613 -34,600 -331,570 -55
1973 932,583 580,019 352,564 80,034 9
1972 852,549 568,610 283,939 -83,800 -10
1971 936,349 554,280 382,069 -106,411 -11
1970 1,042,760 495,675 547,085 62,029 6
1969 980,731 436,685 544,046 323,218 33
1968 657,513 404,301 253,212 259,110 39
1967 398,403 604,211 -205,808 -303,934 -76
1966 702,337 608,775 93,562 -89,400 -13
1965 791,737 489,503 302,234 93,128 12

Source: Statistisches Bundesamt (Destatis), 2018; author’s construct, 2018

Using net migration as the focal point, the paper sought to describe historically the
rationale behind the recorded variations of the absolute values. It was revealed that the
economic crisis of 1966-1967 worsen the tensions over the recruitment of foreign
labourers (also known as guest workers) resulting in 13% decrease in immigrant’s

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flow. This first post-war recession was a hard blow to the ego of the proud "Republic
of the Economic Miracle" which to some extent influenced interventions (specifically
in the area of labour market policy). In 1967, the inflow of foreigners declined
drastically by 76% from 1966 recorded immigrant’s population. This
recession-induced insecurity led to quibbling debates about the sense in employing
foreign workers but perhaps the resolution resulted increased inflow of foreigners
from 1968-1970 (at a decreasing rate from 39% to 6% respectively)

1973 oil crisis led to a recruitment ban of foreign and due to the fact that these
labourers feared they would not be able to return to work in Germany, many foreign
labourers chose not to leave the country at all. This necessary change in the plans on
the part of many "guest workers" transformed their anticipated short-term stay into
permanent residence. Through the right to family reunification, many foreign
labourers arranged the subsequent immigration of their family members to Germany
resulting in an increase of 9%.

Geopolitical changes of between 1980’s to 1990’s led to high influx number of

immigrants, asylum seekers and ethnic Germans returning from former German
settlements (the so-called "Aussiedler") in Eastern Europe (perhaps in 1980’s with the
highest percentages of 31% and 24% change recorded in that period), clearly linked to
the collapse of the Soviet Union. Asylum Compromise policy (which was
implemented in 1993 with emphasis on "safe third-states" of refugee’s migratory
process) was used as a coping strategy causing a decline in immigration after the
incidences of brazen violence against residents with migration backgrounds by native
regarded as diminishing strategy for the influx of foreigners (by 18% decrease in 1993
furthered by 18% decline in 1994).

In the year 2000, dual citizenship became possible in Germany. This change enables
children born in Germany to foreign-born permanent residents to hold a German
passport as well. However, only foreign-born (both first- and second-generation
immigrants) of EU-citizens or parents from states with special bilateral agreements
with Germany may keep their dual citizenship long-term. All others must choose one
of their nationalities upon reaching legal adulthood (see domid, 2018). Parallel to this,
several integrations, naturalisation examination and immigration laws were amended
(from 2005 to 2008) coupled with favourable reception which to some extent led to

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the consistent increase in the number of immigration (from 2007-2015) though
decreased in 2016 and 2017 by 15% and 20% respectively due international
immigration crisis which led to strict checks at entering borders coupled with
effective enforcement of Dublin (regulatory) principle concerning immigration.

4.1.2 Population pyramid for 2017

According to United Nations Population Division (2001), the number of the elderly
population (65 years and above) would increase from 12.6 million in 1995 (that’s
15.5%) to 20.8 million in 2050 (28.4%). Consequently, the potential support ratio11
would be halved, decreasing from 4.4 in 1995 to 2.1 in 2050. Assuming a constant
total population between 1995 and 2050 (81.7 million), a substantial higher number of
immigration (specifically, a total of 17.8 million net migrants) to Germany would be
required with an average inflow of 324,000 migrants per year. However, to maintain
the current potential support ratio of 4.4, an influx of 3.4 million migrants per year is
required. This number would be more than ten times the yearly number of migrants
entering Germany during 1993- 1998. Inferring from this, plate 4.2 shows the
relationship between sex composition, age distribution and people with migrant status
in Germany for 2017.

11
The potential support ratio (PSR) is the number of people age 15–64 per one older person aged 65 or older.
This ratio describes the burden placed on the working population (unemployment and children are not considered
in this measure) by the non-working elderly population.

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Plate 4.2: Population in households, migrant status and age for 2017, Germany

Comparably, the pyramid (see Plate 4.2) clearly shows two major distinctions (thus
people with a migrant background and the other without migrant background). One
might be tempted to say that there’s a positive relation between fertility rate and
immigration (or people with migrant background either by lineage or personal
experience) but the empirical truth is that there should be an introduction of a proxy
variable or some variables should be held constant. People with migrant background
has broader base (precisely, 0-14 age class) than those without migrant background
and this implies that all other things being equal people with migrant background will
have higher number of people joining the active labour force than those without
migrant background. Again, this perhaps can be a complementary strategy coupled
with other high fertility-induced policies, revision of the age for pension scheme
(where necessary) and social welfare policies to curb the anticipated ageing

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population crisis of the country as suggested by the total population age structure of
the pyramid.

4.1.3 Cumulative trend of foreign population

Many researches consider annual inflow of immigrants in their trend analysis (as even
shown in my analysis in chapter two) but I would like to use the cumulative number
of foreign population living in the understudied country. This is categorised into total
number of foreign population in Germany, Europe (as a continent), EU states and
other randomly selected countries of immigrant’s country of origin.

Source: Central Register of Foreigners; Author’s construct, 2018

There has been a consistent increase in the cumulative trend of foreign population in
Germany (at an increasing rate from 2009-2015 with the highest recorded rate of
10.5% in 2015 but increased at a decreasing rate of 9.3% and 5.5% in 2016-2017
respectively), by national composition of foreigners from Europe (see Figure 3.1) as
well as from EU states. Poland emerged as the country with the highest immigrants in
Germany from 2009-2017 though at a sharp decreasing rate. Immigrants from Turkey
declined consistently from 2009-2016 due to bureaucratic decision and strict entries
but Italians in Germany on one hand increased with a minimal percentage change till

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2013when it started recording higher percentage change of inflows unlike United
States that had a slightly stabilised percentage change of immigrants in Germany from
2010-2017. Syria on the other hand had a remarkable increase from 2011 but with a
sharp increase in 2012-2015 (19%, 29%, 52% and 62% respectively) due to social
unrest in their country of origin and increased at a decreasing rate in 2016-2017.
African and Asian immigrants in Germany had a slightly stabilised rate of increase
(from 2009-2012) though increased drastically at an increasing rate from 2013-2017.

4.1.4 Immigration structure of people seeking asylum protection

Notably, this is an issue of public concern and is one of the most delicate issues which
affect every sector of the economy. In context, not all immigrants are asylum seekers
considering pseudo-migration and this section of the paper analyses the trend of
immigration structure of persons seeking protection from 2007 to 2016

Table 4.2: Immigration structure share of persons seeking protection (2007-2016)

Persons seeking protection

Proportion
Average Average age
share in a Protection of persons
duration at date
share in overall rate
Reference date total overall cumulated born in
of stay of first entry
Population immigrant Germany
population

number % years

31-Dec-07 457,430 0.6 6.8 69.1 11.8 10.9 22.2

31-Dec-08 456,050 0.6 6.8 75.6 10.8 11.6 23.1

31-Dec-09 477,595 0.6 7.1 79.9 10.8 12 23.3

31-Dec-10 503,470 0.6 7.5 81.8 11 12.2 23.2

31-Dec-11 505,925 0.6 7.3 81.5 10.4 12.4 23.5

31-Dec-12 549,825 0.7 7.6 82.5 10.3 12.3 23.5

31-Dec-13 613,925 0.8 8 81.5 9.4 11.5 23.6

31-Dec-14 746,320 0.9 9.2 81 8.2 10.2 23.9

31-Dec-15 1,036,235 1.3 11.4 79.8 6.4 8.1 24.1

31-Dec-16 1,597,570 1.9 15.9 84.8 5.3 6 23.5

Source: Statistisches Bundesamt (Destatis), 2018

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From the table above (Table 4.2), it is evident that there has been a consistent increase
at an increasing rate of the share of persons seeking protection (2012-2016) prior to it
stabilised rate of change (2007-2011) when inferred from both its share in overall
population and share in the cumulated immigrant population (though recorded 2%
decrease in the later). The protection column of the table perhaps is one of the reasons
persons seeking protection would choose Germany over other European states and it
policies offers effective and favourable conditions which accounted for the
progression in its absolute value.

On the other hand, the rationale behind the proportion of persons born in Germany by
parents of protection seekers is further examined using the pyramid below (see Plate
4.3);

Plate 4.3: Age structure of people seeking protection, 2017

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The pyramid above suggest that the inflow of asylum or protection seekers recorded
in 2017 had more males (especially, between the age class of 14-50 years) than
females though there were dominance of female in the age class of 70-90 years. Most
of these protection seekers to some extent end up being economic immigrant therefore
accounting for the largest share which is the active labour force class of the age
structure. This implies that there will be high labour competitiveness (based on skill)
all other things being constant and most of these labour supply will end up in the
informal sector of the economy. It is difficult to track fully the contribution of each
migrant due to data deficiency and the informal nature of their employment status
coupled with limited access to social benefit entitlement and perhaps a wage below
the hourly speculated minimum wage of the country.

Inferring from 2017 age structure of people seeking protection (see Plate 4.3), those
with the age 70 and above were smaller perhaps due to the fact that some would
prefer to return home after some years of stay coupled with death and other
unforeseen circumstances.

4.2 Immigration and Economy

The economic impact of immigrants perhaps is dependent on the integration process

put in place by the host economy and this mostly begins with education (either formal
or informal) and shelter. Inferring from recent debate on highly skilled migrants and
host country’s economy, this paper considered percentage share of persons aged 25 to
35 and with a university degree (or university of applied sciences degree) from 2005
to 2016 having either direct or indirect migratory background.

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Source: Author’s construct, 2018

Figure 4.2 is a percentage representation (on the y-axis) comparing university students
with immigration background and who have personal experience of migration; and
those without personal experience but with immigration background. Records of
persons with migration experience of their own show consistent increase but a slight
decrease of 0.5% in 2011 and has higher percentage share than those without
migration experience of their own. This coupled with other factors (such as skill among others)
influenced the study to assess the effect of immigration on wages of less educated
natives and this was not different from the research conducted by Docquier et al, 2014.
Stressing on the fact that higher education levels of the OECD immigrants relative to
the non-migrant natives suggest a positive effect on wages12. All other things being
equal, educated people are innovative and complement less educated workers in
productive activities. Hence, less educated native workers experience particularly
large wage and employment gains in countries (UK, Germany, Australia, Canada etc)
whose immigration systems favour educated immigrants.

On the other hand, some immigrants make provisions for shelter while others don’t
consider this before their arrival due to factors influencing the respective change of
residence. Below is 2017 private household data categorised into foreigners and
12
To some extent International trade through its effect on the patterns of specialization, skill, and rise in income
would increase the demand for human capital in the OECD economies and decrease the demand for human capital
in non-OECD economies. This would generate a force toward a decline in fertility rates and an increase in human
capital investment in OECD economies and toward a rise in fertility rates and a decline in human capital
investment in non-OECD economies. In addition, however, the gains from international trade, would be expected
to generate a rise in income in both OECD and non-OECD countries.

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natives with the intent of knowing the share of foreigner’s respective age structure
(see Table 4.3).

Table 4.3: Private households for 2017

of whom:
Total
Specification Foreigners Natives

in 1,000

Age at the time of entry ... to under ... years

With information on
12,945 7,815 5,130
the year of arrival

under 6 1,442 658 784

6 to 9 875 400 475

10 to 15 1,255 588 666

16 to 19 505 295 210

20 to 24 3,012 2,032 981

25 to 64 5,774 3,796 1,978

65 and over 82 47 35

Average age at the

23.6 24.7 21.8
time of entry

Source: Statistisches Bundesamt (Destatis), 2018

As shown in table 4.3, private household in this context is defined as "a person living
alone or a group of people who live together in the same private dwelling and share
expenditures, including the joint provision of the essentials of living"
(ec.europa.eu/eurostat/cache/metadata/en/ilc_esms.htm). Foreigners that fall within 16
to 65+ age structure of the 2017 private household data had the highest absolute with
a percentage difference of 28.8%, 51.7%, 47.9% and 25.5% respectively. This implies
that most of the active labour force age classes are dominated by foreigners if and
only if there is full employment (which is difficult to say empirically, though there is
a level of contribution to the economy considering human capital). Despite the fact
that the total number of households increased over years, it’s important to know the
relational effect of this on housing cost. To achieve this, multiple regression was used

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with the help of Eviews application (as detailed in the methodology) and the result is
as shown below (see table 4.4)

Table 4.4: Multiple regression result for housing overburden cost and immigration
(2004-2017)13
Estimated Probability
Variable T-Statistic
Coefficient Value

D(GER_HOCR(-1)) -0.789057 -3.542705 0.01*

D(GER_OCR(-1)) 1.244413 2.523482 0.04**

D(GER_HOUSEHOLD(-1)) -0.006939 -1.868457 0.09***

Source: Author’s construct, 2018

Inferring from table 4.4, a percentage increase in GER_HOCR(-1)) will translate to

0.79 decrease in the current year’s housing cost overburden rate value (at 5%
significant level); a percentage increase in GER_OCR(-1)) will have 1.24 increase in
the current year’s housing cost overburden rate (at 5% significant level), addition of
one private household to the previous year’s GER_HOUSEHOLD value will cause
0.01 decrease in current year’s housing cost overburden rate (at 10% significant level).
This means that, one percent increase in overcrowding rate will increase housing cost
overburden rate significantly whereas addition of one person to household decreases
housing cost overburden rate but insignificantly.

4.2.1 Immigration and location choices

Albert and Monras (2018) noticed that immigrants tend to move to where previous
immigrants have settled. Immigrant networks are recognised as key for the migration
experience (Munshi 2003). Former immigrants likely help newer ones both in
migrating and in finding jobs and suitable neighbourhoods for their new life in the
host country. Inferring from Albert et al, 14
spatial equilibrium model where

13
The column “Estimated coefficient “denotes the coefficient of the lag of the independent variables in the
multiple regression equation. ***, **, and * indicate rejection of the null hypothesis at the 1, 5, and 10 percent
levels of significance, respectively.

14
There are some degree of substitution between consuming locally or in the country of origin since they are
rational consumers.

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immigrants and natives are identical except for the fact that immigrants also care
about home country consumption. For instance, if home country prices for
commodities are low, immigrants have incentives to substitute some local (or
destination country’s) consumption towards consumption in their countries of origin,
which in turn affects their incentives for living in high relative to low nominal income
locations. Immigrants prefer to locate in large and expensive cities where there is
redistribution of economic activity (considering competitive advantage). This
redistribution of economic activity results in higher overall output in the long-run due
to the fact that immigrant location choices move economic activity towards the most
productive locations effect or output which in turn affect overall gains. Again,
location choices of immigrants perhaps influence internal migration from one region
to another based on factors such as employment rate (low to high and vice versa in
terms of labour demand) and proximity to work places, hence, variations in
employment rate per regions in Germany (see Figure 4.3).

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Source: OECD.Stat [lfst_r_lfe2emprt], 03/11/2018 and Author’s construct, 2018

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Inasmuch there was a consistent increase in the rate of employment of most regions
(including Baden-Württemberg, Stuttgart, Tübingen, Bayern, Schwaben, among
others) from 2005-2017, about 50-60% of the regions recorded a decline in their
respective rate in 200915. Oberbayern had the highest employment rate from
2013-2017 followed by Freiburg (though ranked first in 2010-2012). Berlin
(especially in 2005-2008) is one of the regions with the lowest employment rate due
to perhaps its administrative setting, business environment, settlement and urban
development plans. This data is used by most immigrant to assess the employment
viability of regions through the help of their nationals or colleagues since it’s believed
that most immigrants location choices are influenced by social determinants (the
number of immigrants from their home country, culture, religion, integration and sex
structure) and economic determinants (cost of living, access to employment in terms
of “skill demand”, openness of the regional economy in terms of trade).

4.2.2 Trend of migrant’s remittances, the case of Germany, Norway and Sweden

Beyond any doubt, much of the developmental impact of remittances will depend on
the magnitude of its value and how productively the receiving economy and
households use it and this looked at both at the macro level (effects on the national
economy) and the micro level (effects on recipient region and households). At the
macro level, the most direct and significant impact of remittances is on the volume of
foreign exchange reserves. Considering balance of payment account for instance,
increase remittances from immigrants can reduce particularly the current account
deficit of the country of origin (depending on the volume of the cash inflow) which
perhaps can ultimately results in conducive business environment for foreign
investment. Parallel to this, it also solves the financial constraints faced by many
small-scale enterprises by utilizing migrants’ family small savings if the financial
institutions in the country are strong enough.

15
Despite short-time work, working time account and establishment-level pacts for employment, there was a
decline or fluctuations in the German’s labour market in 2009 due to 2008-2009 economic crisis. Berlin’s
employment rate has improved due to drastic fall in unemployment (from 19% in 2005 to 5.2% in May 2018) as a
result of labour market policies that has become a key driver of a consumer-led economic upswing coupled with
the cutting-down of unemployment insurance contributions by 0.3% in order to generate annual savings of 3.5
billion euros for employees and employers

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At the micro level, if the remittances are used for buying commodities of daily use, it
definitely leads to the development and expansion of manufacturing sector of the
country by increasing the demand for goods and labour thus increasing their income
distribution of the economy holding other factors constant. Again, families of these
immigrants doesn’t spend completely all the money they receive rather a share thereof
is deposited in the banks which serves as a means of financing loans to other
households leading to overall entrepreneurial development of the concerned area (as
the case of Saif Ahmad, 2014). The paper examined the trend or both the cash inflow
and outflow of the German economy with the motive of knowing the GDP percentage
share and the net balance of migrant’s remittances in order to inform future research

Table 4.5 Trend of migrant’s remittances, Germany (2010-2017)

Remittance Remittance Remittance Remittance

Remittance
Date balance received received sent
sent (M.)
(M.) (%GDP) (M.) (%GDP)

2017 -7,837.50 0.45% 16,833.30 0.67% 24,670.90

2016 -6,527.40 0.48% 16,683.20 0.67% 23,210.60

2015 -7,605.20 0.45% 15,362.10 0.68% 22,967.20

2014 -5,780.30 0.45% 17,629.10 0.60% 23,409.50

2013 -6,949.60 0.42% 15,791.50 0.61% 22,741.10

2012 -7,376.00 0.39% 13,655.20 0.59% 21,031.10

2011 -6,883.20 0.40% 14,885.90 0.58% 21,769.10

2010 -7,324.90 0.38% 12,969.50 0.59% 20,294.30

Source: countryeconomy.com/demography/migration/remittance/germany, 2018

A quick glance at Table 4.5 suggests that there has been a consistency of high
remittance sent by immigrants than remittance received with emigrants resulting in
the negative remittance balance. Both remittances sent and received recorded a
decline in 2015 absolute value from the immediate past year perhaps led to policies
affecting remittances though immigrants in Germany recorded their highest GDP
percentage share (0.68) of remittances sent to their country of origin (in 2015).
Remittances received into the economy increased by 0.03% share of GDP in 2016
because it recorded the highest number of emigration in this year (other things being

91 | P a g e
equal) but immigration on the other hand declined in 2016 reflecting in the decrease
in remittance sent value. The trend of migrant’s remittances balance (remittance
received minus remittance sent) is graphically depicted for Germany, Norway and
Sweden (see figure 4.4)

Source: Author’s construct, 2018

From the horizontal axis of the graph, the digit 1 to 8 represents the year range from
2010 to 2017 respectively. It shows that only Sweden recorded positive net
remittances from migrants with emphasis on net migration. Sweden recorded negative
balances both at initial and ending periods of the series. On one hand, Norway had a
tremendous increase in its negative balance in 2014 and this increased to 2017 but at a
decreasing rate. On the other hand, Germany experienced fluctuations in its negative
net remittances at a decreasing rate (2010-2017) though recorded the lowest negative
balance in 2014. Inferring from figure 3.4, however, there’s little evidence that
increased remittance sent have much impact on overall economic growth in home
countries of migrants since the increase perhaps may be due to improved
measurement methods rather than more actual cash; that economic data and modelling
techniques may be inadequate to detect any growth effects; and that remittances from
migrants may be partially offset by the depressing effect those migrants’ absence has
on their home country’s economy.

4.2.3 The link between immigration and GDP: an empirical analysis

Multiple regression and Vector Autoregressive Granger causality estimation was used
to assess the relationship and whether immigration affect or has an effect on economic
prosperity respectively as detailed in the section dedicated to methodology. The
variables used in this analysis are listed in table 4.6, particularly, GDP meaning the

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yearly growth rate of GDP values; HDI_EDU/HDIE is expressed as mean and
expected years of schooling; NET_MIGRA/NET_MR expressed as the net
migration rate; FOREIGN_EMP expressed as the employment rate of foreign-born
migrants (with N and S being the prefix for Norway and Sweden respectively), and
GEN_EMP representing general employment rate in order to know the significant
contribution and volume difference between general and foreign employment. The
purpose of this research is to add value to existing stock of literature, hence,
influenced the variable selection in order not to spur conflict between natives and
foreigners. The selection of foreign employment rate as a variable recommends future
research on ‘the number of working hours of foreign-born migrants and its impact on
GDP. The variables with the prefix ‘D’ means the variable is at first difference. This
is because some of the variables was non-stationary at level so it has to be differenced
in order to satisfy one of the basic (stationarity of variable) principle of using Eviews
for regression and VAR estimations (see table 4.6)

Table 4.6: Multiple regression results for GDP as dependent variable

(1970-2017)16

Country Variable Coefficient t-Statistic Prob. R-squared

HDI_EDU 244.99 6.456 0.003*** 0.981

NET_MIGRA 0.012 7.064 0.002***

Germany
D(FOREIGN_EMP) 1.76 7.976 0.001***

D(GEN_EMP) 1.99 2.998 0.04**

D(N_HDIE) 223.92 3.720 0.065* 0.982

D(NNET_MR) 0.83 4.898 0.039**

Norway
NGEN_EMP 1.19 6.183 0.025**

D(NFOREIGN_EMP) 0.27 3.629 0.068*

Sweden D(SWEDEN_HDIE) 38.66 0.198 0.048** 0.752

16
The multiple regression equation used was YGDP_growth = β0 + β1HDI_EDU + β2NET_MIGRATION_RATE+
β3FOREIGN_EMP + β4GEN_EMP + Error

Note: The column “coefficient” denotes the coefficient of the lag of the independent variables in the multiple
regression equation. ***, **, and * indicate rejection of the null hypothesis at the 1, 5, and 10 percent levels of
significance, respectively. The R-squared column also denotes the goodness-of-fit of the selected variables in the
model

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 D(SNET_MR) 0.478 0.701 0.050*

D(SGEN_EMP) 3.295 3.559 0.012***

SFOREIGN_EMP 2.516 2.974 0.025**

Source: Author’s construct, 2018

Case of Germany

It was interesting finding that all the considered independent variables had p-value
lower than 5% significant level. However, the estimated effect of the independent
variables on GDP growth prior the VAR estimation was looked at using multiple
regression above and it revealed that one percentage increase in Human Development
Index for Education will have 244.99 increase in the values of GDP growth (at 1%
significant level), a percentage increase in net migration rate will cause 0.01increase
in the values of GDP growth (at 1% significant level); a percentage increase in
foreign-born migrants who are employed will translate to 1.76 increase in the values
of GDP growth (at 1% significant level); a percentage increase in general employment
rate (both natives and foreign-born) will translate to 1.99 increase in the values of
GDP growth (at 5% significant level) and with a goodness-of-fit of 98% as suggested
by the R-squared. Below is the corresponding result for the VAR Granger
causality/Blocked Exogeneity Wald Test

Table 4.7: VAR Granger causality/Blocked Exogeneity Wald Test for Germany

Dependent variable: NET_MIGRATION

Dependent variable: GDP_GROWTH
RATE

Excluded Chi-sq df Prob. Excluded Chi-sq df Prob.

HDI_EDU 3.719 1 0.0538** GDP_GROWTH 12.666 1 0.00***

NET_MIGRA 7.777 1 0.0053*** HDI_EDU 4.059 1 0.044**

D(FOREIGN_EMP) 1.032 1 0.3097 D(FOREIGN_EMP) 16.133 1 0.00***

D(GEN_EMP) 1.594 1 0.2068 D(GEN_EMP) 3.221 1 0.073*

All 8.293 4 0.0814* All 18.392 4 0.001***

Source: Author’s construct, 2018

Note: ***, ** and * indicate rejection of the null hypothesis at the 1, 5 and 10 percent
levels of significance, respectively.

94 | P a g e
 These results specify the estimated chi-square, degree of freedom and p-values for the
respective Granger causality test for the independent variables. The second table on
the right is the inverse test just to see how the results would be when immigration is
made the dependent variable. The findings of this paper was hence based on All
(jointly estimated row for) the independent variables (X) which granger cause the
dependent variable Y (GDP growth) at 5% level of significance. Meaning education,
net migration rate, general employed persons and foreign-born migrants who are
employed series is able to increase the accuracy of the prediction of (or the variation
in) economic growth at 10% level of significance. Again, the outputs suggest that
there’s a unidirectional causality between immigration and economic growth at 5%
significant level and therefore satisfy H1 assertion.

Case of Norway

As revealed by table 4.6, one percentage increase in Human Development Index for
Education will translate to 223.92 increase in the values of GDP growth (at 10%
significant level); a percentage increase in net migration rate will cause 0.83 increase
in the values of GDP growth (at 5% significant level); a percentage increase in
foreign-born migrants who are employed will translate to 0.27 increase in the values
of GDP growth (at 10% significant level); a percentage increase in general
employment rate (both natives and foreign-born) will translate to 1.19 increase in the
values of GDP growth (at 5% significant level) and with a goodness-of-fit of 98% as
suggested by the R-squared.

Table 4.8: VAR Granger causality/Blocked Exogeneity Wald Test for Norway

Dependent variable: NGDP_GROWTH Dependent variable: D(NNET_MR)

Excluded Chi-sq df Prob. Excluded Chi-sq df Prob.
D(N_HDIE) 1.816 1 0.178 NGDP_GROWTH 313.672 1 0.000
D(NNET_MR) 2.147 1 0.143 D(N_HDIE) 341.226 1 0.000
NGEN_EMP 0.193 1 0.66 NGEN_EMP 33.140 1 0.000
D(NFOREIGN_EMP) 0.727 1 0.394 D(NFOREIGN_EMP) 0.405 1 0.524
All 5.563 4 0.234 All 612.992 4 0.000
Source: Author’s construct, 2018

From NGDP_GROWTH results, All (estimated row for) the independent variables (X)
does not Granger cause the dependent variable (GDP growth) at 5% level of
significance, therefore, the paper fail to reject the null hypothesis. On the contrary, the
independent variables from D(NNET_MR) results shows that all the p-values are

95 | P a g e
lower than 0.05 therefore this paper reject the null hypothesis. This means that there’s
a unidirectional causality between Annual GDP growth and immigration and therefore
satisfy H1 assertion.

Case of Sweden

Table 4.6 revealed that one percentage increase in Human Development Index for
Education will translate to 38.66 increase in the values of GDP growth (at 5%
significant level); a percentage increase in net migration rate will cause 0.48 increase
in the values of GDP growth (at 5% significant level); a percentage increase in
general employment rate will translate to 3.29 increase in the values of GDP growth
(at 1% significant level); a percentage increase in foreign-born migrants who are
employed will translate to 2.52 increase in the values of GDP growth (at 5%
significant level) and with a goodness-of-fit of 75% as suggested by the R-squared.

Table 4.9: VAR Granger causality/Blocked Exogeneity Wald Test for Sweden

Dependent variable: SGDP_GROWTH Dependent variable: D(SNET_MR)

Excluded Chi-sq df Prob. Excluded Chi-sq df Prob.
D(SWEDEN_HDIE) 1.223 1 0.269 SGDP_GROWTH 0.915 1 0.339
D(SNET_MR) 0.000 1 0.997 D(SWEDEN_HDIE) 2.031 1 0.154
D(SGEN_EMP) 0.235 1 0.628 D(SGEN_EMP) 0.879 1 0.349
SFOREIGN_EMP 8.214 1 0.004 SFOREIGN_EMP 0.612 1 0.434
All 25.726 4 0.000 All 11.741 4 0.019
Source: Author’s construct, 2018

The VAR results from table 4.9 in the case of Sweden suggest bidirectional causality
between Annual GDP growth and immigration and therefore satisfy H2 assertion.
Jointly, there’s causality at 5% level of significance, therefore, the null hypothesis is
rejected.

In conclusion, the results of this paper suggest that there is a positive relationship
between economic growth and net migration though the magnitude or intensity of
immigration effect on economic growth is insignificant or relatively close to zero in
some selected countries in Western Europe.

Most importantly, these results are consistent with economic theory considering the
force of immigration on some determinants of economic growth such as capital
accumulation, labour productivity and returns, human capital accumulation and
technological innovation. Hence, this paper seeks to highlight that the relationship

96 | P a g e
between migration and economic growth is a complex one since it has two-way
relationship coupled with other differential institutional capacities and heterogeneous
resource endowment of countries.

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 Chapter Five

Findings, recommendations and conclusion

Most of findings of this paper corresponds with works done by several researchers as
far as the subject area is concerned though new dimension of findings were also
realised and some recommendations were also made as shown below

5.1 Employment and competition

Earnings of migrants and immigrants characteristics on employment outcome to some

extent is heavily dependent on educational level, social capital, age, gender,
occupation and sector of work, and employment status (formal or informal and
temporal or permanent) and country of origin17.;

Again, it is difficult to track fully the contribution of each migrant due to the informal
nature of some of their employment status. This paper recommends that government
should device a mechanism to track fully the effect of immigrants to the economy
targeting informal sectors perhaps since its dominated by immigrants.;

Immigrants living in areas where there is a large share of natives are more likely to be
employed than those living in areas dominated by immigrants.;

Employee’s selection done by only the state or employers may lead to moral hazards
or affect the economy when there is high demand coupled with efficient market taken
into account highly skilled immigrants. This is because restriction of immigrants in
some areas or sectors of the economy can lead to employee-poaching or rise in
monetary incentives though a market cannot be completely efficient. Hence, an offer
to raise one’s salary can influence his/her occupational choices. It is recommended
that government set a minimum skill requirement for all workers not only immigrants
and allow employers to make the actual selection adequate supervision and
monitoring from the state. Again, proactive recruitment of future migrants has to be a
“well managed process” assuring the best possible benefits for the receiving countries,
sending countries and the migrant in order to bridge the gap between brain gain and
brain drain.

17
This finding conform to World Bank: Brief on the impact of migration and development in the MDGs
(Washington DC, 2013

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Last but not the least, this paper finds that there is competitive edge in competition for
highly skilled (immigrants) labour in theory but this directive (emanating from the
blue card convention) practically has manifested insignificantly due to sovereignty (as
consistent with Doomernik et al 2009 research) and measurement issues. I believe that
when international migration is seen as a global phenomenon with effective, efficient
and human-centered integration processes (as suggested by Wickramasekara, 2003)
are in place, the directive above could manifest significantly.

5.2 Entrepreneurship

Immigration can increase the likelihood of a return migrant becoming an entrepreneur

due to accumulation of savings and human capital (through increase in domestic skill
level by increasing the interest in upgrading skills which could benefit the domestic
labour market, as also identified by Katseli et al, 2016), while abroad.

5.3 Housing

Racial and price discrimination in the housing market perhaps could be a reason for
the anticipated increase of room occupancy and overcrowding rate of immigrants;

High share of (irregular) immigrants in a concentrated area may impose negative

congestion externalities if the job market is too crowded taken into consideration
informal hiring process and displaced workers.;

Findings also suggest an increasing rate of housing cost overburden rate and
overcrowding rate though tax refund compensate rent cost coupled with regular
housing maintenance.;

5.4 Demographics

Selection may occur in both internal and international migration perspectives and this
may lead to assimilation of destination’s fertility attitudes and behaviours; however,
migration may also disrupt fertility at the same time on the destination. Moreover,
relationship between migration and fertility is complex phenomenon as different
factors and policies operate at the destination due to change in environment, hence,
policies and schemes regarding immigration and fertility should be well coordinated
and harmonised through simulation tools in order to inform accurate policies and
implementations.

99 | P a g e
Again, immigration can be used as a coping strategy in the medium-term to increase
the size of the working-age population (as shown in Germany’s analysis from the
previous chapter). Though, the potential support ratio is project to decrease to 2:1 by
UNDP (2001) if the age at retirement doesn’t change18. It is therefore recommended
that increasing upper limit of working-age for retirees together with incentive
packages for high or large family size, and increasing incentive contributions from
employers in an attractive manner should be encouraged, monitored and evaluated by
the country’s labour division in order to increase labour participation prior to policy
measures tailored to resource sustainability with emphasis on efficient productivity
mechanisms that is currently in use. Again, pension policies should be amended in
order to make workers enjoy most of their pension contributions whiles working than
when they are on retirement, if and only if the pension age extension holds or take it
effect.;

Women who are immigrants are not only inactive after migration but are more
susceptible to retreat from the labour market (as the case of France).;

In the absence of migration, some countries with fertility below replacement level will
see their population size declining at some point of time in the near future19. This
because the number of migrants needed to offset population decline for instance in
France and Germany is less than recent past experience of inflow of immigrants in the
1990’s due to family reunification but in contrast, Italy recorded an inflow of
immigrants with much higher percentage than that experienced in the recent past
would be needed to offset it population decline in the long-term (as consistent with
UNDP research in 2001).

5.5 Integration

It was revealed that how policy measures on integration as well as it process are
implemented in practice and the extent of it adaptability by actors should be looked at
considering it legal-political, socio-economic and cultural-religious dimensions. For
18
This is the ratio of 4:1 or 5:1 depending on some factors of the country whereby 4-5 persons within the
working-age class (15-64 years) caters for 1 person within 65 and over age bracket;

19
According UNDP (2001) replacement migration refers to the international migration that would be needed to
offset declines in the size of a population, and declines in the population of working age, as well as to offset the
overall ageing of a population

100 | P a g e
instance, Germany, France, Sweden, Norway, New Zealand and Netherlands are close
to achieving most of their integration policy measures, strategies and activities
regardless of the concept of citizenship. However, it was difficult gaining access to its
comprehensive budget in order to match it with their achievements (in more practical
way than just a discourse).

5.6 Remittance

The sheer size of remittance flows means that one country’s immigration policies can
have significant effects on other, more remittance-reliant countries. However, there’s
little evidence that increased remittance sent have much impact on overall economic
growth in home countries of migrants.

Moreover, remittance figures captured in this paper was what came to light from the
collation by the financial institutions, hence, perhaps not the true value since most
irregular migrant prefer given their remittance to someone visiting their country of
origin (as identified by Ban, 2012 pg. 137) due to the fluctuations of high remittance
commission cost (ranging between 7-18% as at 2015 according to Worldbank, 2015).
Large share of these irregular migrants can be attracted in patronising remittance
transactions through financial institutions in order to get consistent or close to true
value data by minimising commission charges coupled with the adaptation of other
technological modes of money transfer (example, mobile money transfer strategy) at a
less charge of commission (both in country of origin and destination) and
documentation requirement in order to serve as an incentive for capturing the
residual20 demand whiles contributing indirectly to the consistency, adequacy and
reliability of remittance data.

5.7 Economic growth

International migration has both explicit and implicit effects on economic growth.
Given the age structure of inflows and human capital, immigration tends to expand
the workforce thereby contributing to aggregate GDP growth. The impacts of
immigration on receiving labour markets differ depending on the approach, the
country and the geographical scale used. This paper finds only marginal effects on

20
The residual demand is the market demand that is not met by other firms in the industry at a given price with
respect to time.

101 | P a g e
GDP growth, with potentially more impact on low-skilled workers or past migrants
(same as the findings of Longhi et al, 2010.) However, the education structure of
inflows has important implications for the productivity effects of immigration. Policy
recommendations includes harnessing the full potential of migrants’ skills to support
inclusive economic growth (with emphasis on the informal labour market considering
skill assessment as specified by OECD, 2014); Reducing the costs of labour
migration to enhance the benefits for international migrant workers
(from country of origin point of view considering labour migration cost effect on
immigrants, and from destination country point of view, the effect of this cost on the
degree of consumption by immigrants in host country as consistent with SDG, 2015);
and International cooperation and multilateral dialogue on illegal migratory process
and it rippling effects.

102 | P a g e
 Conclusion
Researching the integration of immigrants is becoming increasingly relevant in all
European countries. To produce high-quality integration research, scholars should
have access to data about immigrants and the data should be systematic (collected
on large/representative groups of immigrants and over time) and both objective and
subjective.

There’s little evidence that increased remittance sent have much impact on overall
economic growth in home countries of migrants as explained in chapter four (4.2.2)

Immigration can be used as a complementary strategy coupled with other high

fertility-induced policies, revision of the age for pension scheme (where necessary)
and social welfare policies to curb the anticipated ageing population crisis of some of
the selected countries especially Germany and Italy.

Immigrant’s location choices are influenced by social determinants (the number of

immigrants from their home country, culture, religion, integration and sex structure)
and economic determinants (cost of living, access to employment in terms of “skill
demand”, openness of the regional economy in terms of trade).

Most importantly, the effect of immigration on economic growth or prosperity varies

by countries as indicated by VAR granger causality test output for Germany, Norway
and Sweden though immigration has a positive effect on economic prosperity but the
magnitude or weight of this effect is relatively small or approximately zero.

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Appendices

Austria 1990 1995 2000 2005 2010

Total Mediu Mediu Mediu Mediu

immigration stock Total Low Medium High Total Low m High Total Low m High Total Low m High Total Low m High

Men 302199 150420 121310 30469 391393 180000 163276 48117 388480 164863 166017 57600 444973 159330 189806 95837 486936 157526 236689 92721

Women 239970 139680 78830 21460 238212 91403 115875 30934 427521 222561 159321 45639 483239 223913 188433 70893 527264 222062 228592 76610

Germany 1990 1995 2000 2005 2010

Men 131033 48508 254450 107514 51686 261579 103661

1977196 1028078 708849 240269 2516731 1196017 868665 452049 2709141 1 913726 4 0 5 952488 7 9 2 990553 588634

Women 127125 31014 234992 125577 40220 253311 121682

1487997 1017425 325707 144865 1996948 1199493 507407 290048 2180744 0 599352 2 9 4 691951 4 3 1 784545 531747

Spain 1990 1995 2000 2005 2010

Men 14834 186112 44571 249876 139789

255386 87088 108663 59635 400858 131405 178156 91297 800594 238788 413466 0 7 489003 926408 6 5 494284 3 606588

Women 15412 169166 42664 238548 127533

295306 112338 133194 49774 435633 142118 208869 84646 807585 221723 431739 3 9 429090 835932 7 1 444625 0 665526

France 1990 1995 2000 2005 2010

Men 141770 32439 178608 123062 38712 231059 149018

1793622 1492335 104367 196920 1923994 1536747 136656 250591 1902566 5 160471 0 1 2 168339 0 8 5 294869 525544

Women 142075 28399 186150 133648 34358 239847 153959

1641450 1396573 107993 136884 1797188 1459942 143533 193713 1879019 1 174273 5 0 4 181429 7 3 1 319140 539742

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Netherlands 1990 1995 2000 2005 2010

Men 11164 15400

460651 311113 85257 64281 497865 314718 97173 85974 575125 313064 150412 9 645081 329248 161831 2 701304 324277 202999 174028

Women 12436 16461

478789 330041 85079 63669 507826 321016 99132 87678 597171 310409 162397 5 689856 345934 179312 0 763631 335090 226349 202192

Norway 1990 1995 2000 2005 2010

Men 71334 22560 31791 16983 87525 23950 41082 22493 111522 24917 55703 30902 136375 27464 67640 41271 222951 42970 107452 72529

Women 65626 16892 31289 17445 85311 20097 41064 24150 110911 24325 53741 32845 142981 24768 67861 50352 208817 27756 95239 85822

New Zealand 1990 1995 2000 2005 2010

Men 16093
210492 69521 35321 105650 274303 148556 38796 86951 295293 111333 90765 93195 366066 116724 88410 2 391318 132507 113387 145424

Women 14854
213066 87883 49834 75349 283583 162508 52412 68663 320391 124113 109092 87186 396333 131400 116388 5 433358 146081 139469 147808

Sweden 1990 1995 2000 2005 2010

Men 12326
304013 134365 117810 51838 355352 143445 136002 75905 386344 136670 155028 94646 438051 148297 166493 1 546966 168878 200915 177173

Women 10119 13823

325903 162221 110235 53447 388150 179302 132600 76248 428999 176684 151124 1 486464 184878 163353 3 588710 189002 199792 199916

Source: https://www.iab.de/en/daten/iab-brain-drain-data.aspx (GMT: 11:30 AM), 11 SEP 2018; Author’s construct, 2018

Table 3.9 (above) is the immigration stock by educational level (brain drain) for the selected countries.21

21
Three distinguished levels of education were considered namely: primary (low skilled: includes lower secondary, primary and no schooling); secondary (medium skilled:
high-school leaving certificate or equivalent) and tertiary education (high skilled: higher than high-school leaving certificate or equivalent).

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Table 3.10 below depicts educational attainment of immigrants only in Italy and by sex
Level of 2015 2016
Education 2017

Males % Females % Total % Males % Females % Total % Males % Females % Total %

Primary school
certificate, no
educational
degree 166 5.9 80 2.8 246 8.7 170 6 78 2.7 248 8.7 176 6.2 74 2.6 250 8.8

Lower secondary
school certificate 616 21.9 414 14.7 1,030 36 686 24.2 449 15.8 1,135 40 708 25 469 16.6 1,177 42

Upper and post

secondary 609 21.6 594 21.1 1,203 43 564 19.9 576 20.3 1,141 40 536 18.9 533 18.8 1,069 38

Tertiary
(university,
doctoral and
specialization
courses) 126 4.5 210 7.5 336 12 116 4.1 198 7 314 11.1 118 4.2 214 7.6 333 11.8

Total 1,518 54 1,297 46 2,815 100 1,537 54 1,301 46 2,838 100 1,538 54 1,291 46 2,829 100

Source: Immigrants.Stat, 05 Sep 2018 11:02 UTC (GMT); author’s construct

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Below is table 3.11 depicting some obstacles for getting suitable job by foreign born
immigrants (first and second generation of immigrants) in 2014;

Lack of Citizenship Origin,

Lack of recognition of religion or
language of residence social No Other No
GEO/BARRIER skills qualifications permit background barrier barriers response Total

Spain 4.1 10.5 2.0 1.5 24.8 53.8 3.3 100.0

France 16.0 15.4 : 6.6 46.3 13.9 1.8 100.0

Italy 12.4 26.6 7.6 8.6 42.6 2.1 : 100.0

Austria 24.1 27.3 : 3.1 27.6 15.1 2.8 100.0

Sweden 14.4 10.4 : 8.0 30.1 33.9 3.0 100.0

Norway 20.7 11.1 : 3.2 17.9 38.4 8.7 100.0

Source: Eurostat [lfso_14oeduc], 2018; author’s calculation

4.10: Total fertility rate (per woman) by years and citizenship of the mother, Germany
(1991-2017)

Citizenship of the
mother
Year
German Foreign

1991 1.255 2.039

1992 1.203 2.02

1993 1.187 1.931

1994 1.153 1.838

1995 1.162 1.801

1996 1.223 1.883

1997 1.278 1.924

1998 1.273 1.865

1999 1.286 1.829

2000 1.306 1.836

2001 1.288 1.738

2002 1.284 1.712

2003 1.284 1.702

2004 1.304 1.692

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2005 1.291 1.663

2006 1.285 1.639

2007 1.332 1.638

2008 1.348 1.584

2009 1.331 1.57

2010 1.365 1.611

2011 1.339 1.818

2012 1.357 1.792

2013 1.367 1.798

2014 1.417 1.862

2015 1.427 1.955

2016 1.46 2.28

2017 1.453 2.151

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