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Hippolyte D’Albis
π Economy

Covid-19: decline in immigration will reinforce deterioration of our economy

Hippolyte d’Albis, CNRS Research Director and Professor at Paris School of Economics

In 2020, the num­ber of first-time res­i­dent visas issued in France (220,535) decreased by 20.5% com­pared to 2019. Immi­gra­tion to re-join fam­i­ly remains the main rea­son for visas being grant­ed (75,245), although the total has decreased by 16.9%. There are few­er for­eign stu­dents (71,900, down 20.4%) and eco­nom­ic immi­grants (26,950*) is the group most affect­ed by the Covid-19 cri­sis with a 31% decrease. What are the con­se­quences of this downturn?

If the down­turn recov­ers, the effects will be fair­ly lim­it­ed, par­tic­u­lar­ly in com­par­i­son with oth­er dis­as­ters caused by the pan­dem­ic. How­ev­er, if there are last­ing restric­tions on inter­na­tion­al mobil­i­ty – due to health-relat­ed caus­es or a par­a­digm shift lead­ing to soci­eties clos­ing them­selves off – the effects will be very neg­a­tive for the econ­o­my. Our empir­i­cal work with Ekrame Boub­tane and Dra­mane Coulibaly shows that a fall in inter­na­tion­al migra­tion reduces per capi­ta income, increas­es unem­ploy­ment, wors­ens the bal­ance of pub­lic finances and con­tributes to the growth of cer­tain inequalities. 

When we break­down the rea­sons for admis­sion that you men­tion, it makes it pos­si­ble to clar­i­fy this over­all analy­sis. Half of the non-EU nation­als enter­ing France each year are admit­ted so that they may join their fam­i­ly (spous­es of French nation­als or for­eign­ers). The decrease in this inward flow con­sti­tutes a loss of well-being for the house­holds con­cerned and a breach of the right to live with one’s fam­i­ly. At the begin­ning of the cri­sis, there was a dif­fer­ence in treat­ment between French nation­als abroad wish­ing to return to France and for­eign­ers wish­ing to join their fam­i­lies legal­ly resid­ing in France.

A quar­ter of non-EU nation­als enter­ing France each year are admit­ted for study pur­pos­es. The decline in the num­ber of inter­na­tion­al stu­dents rep­re­sents a reduc­tion in oppor­tu­ni­ties to acquire skills; in addi­tion to the per­son­al effects, this will have con­se­quences for the devel­op­ment of coun­tries in the South, whose youth will be less well trained.

Labour migra­tion is in the minor­i­ty, account­ing for 10%. Nev­er­the­less, it is essen­tial because it makes the labour mar­ket more flu­id and fills jobs that would oth­er­wise remain vacant. Immi­grants are over-rep­re­sent­ed in sec­tors that have dif­fi­cul­ty hir­ing such as con­struc­tion, cater­ing, per­son­al care and ser­vices, secu­ri­ty guards and agri­cul­ture (which depends on for­eign sea­son­al work­ers). We saw this in Spring, dur­ing the first lock­down, with the call to help farm­ers in France. The econ­o­my is sim­ply less pro­duc­tive when these jobs are not filled.

From an eco­nom­ic point of view, what can be said about the decline in the num­ber of peo­ple admit­ted as stu­dents or for fam­i­ly reasons?

Even when not admit­ted for eco­nom­ic rea­sons, immi­grants can con­tribute to the econ­o­my. In an arti­cle pub­lished in 2016 in the Annals of Eco­nom­ics and Sta­tis­tics, we even showed that peo­ple arriv­ing for fam­i­ly rea­sons con­tribute more than oth­ers. This is explained by the fact that they work, pay tax­es and above all con­sume in France. The eval­u­a­tion of the effects of immi­gra­tion should not be lim­it­ed to micro­eco­nom­ic approach­es because much of the big­ger pic­ture is at stake. 

As far as stu­dents are con­cerned, some of them stay in France after their stud­ies and thus con­sti­tute the qual­i­fied immi­gra­tion that gov­ern­ments want and that too many immi­gra­tion ana­lysts refuse to see, repeat­ing tire­less­ly that immi­gra­tion to France is not qual­i­fied. The stakes are high: one study showed that for­eign stu­dents in the US were more like­ly than US stu­dents to file for a patent. In sup­port of these sta­tis­tics, there are many anec­dotes and with­out going back to Marie Curie, we can men­tion Özlem Türe­ci and Ugur Sahin (BioN­Tech’s mes­sen­ger RNA vac­cine) in Ger­many or Sergey Brin (Google) in the US.

Are there areas of com­pe­ti­tion for cer­tain jobs between French, Euro­peans and non-EU citizens? 

There is com­pe­ti­tion for skills from non-EU coun­tries and EU coun­tries, espe­cial­ly East­ern Euro­pean coun­tries. Near­ly 80,000 peo­ple from EU coun­tries came to France in 2017; this is five times less than Ger­many and, rel­a­tive to the French work­ing pop­u­la­tion, these low flows are insuf­fi­cient to meet eco­nom­ic needs. Indeed, France mas­sive­ly employs sec­ond­ed work­ers – more than 240,000 peo­ple in 2017, i.e. three times more than ten years ago – who do not come under the head­ing of immi­gra­tion because they come in the con­text of a one-off mis­sion, but who gen­er­ate scan­dalous social dump­ing. These unfilled needs of the French econ­o­my also reveal that the edu­ca­tion­al offer in France does not ful­ly cor­re­spond to the coun­try’s needs. 

What are the con­se­quences of Brex­it on the UK econ­o­my and labour market?

Immi­gra­tion to the UK has not decreased in recent years, but it has increased less than emi­gra­tion. The bal­ance of the two has been falling steadi­ly since 2016. And as much as immi­gra­tion is good for a coun­try’s activ­i­ty and employ­ment, emi­gra­tion has the oppo­site effect. This devel­op­ment is there­fore reces­sion­ary for the UK. 

Inter­view by Clé­ment Boulle

*The bal­ance includes immi­gra­tion for human­i­tar­i­an rea­sons (32,080, down 15.3%) and immi­gra­tion for oth­er reaso

Contributors

Hippolyte D’Albis
Hippolyte d’Albis
CNRS Research Director and Professor at Paris School of Economics
Hippolyte d'Albis is a CNRS Research Director and Professor at the Paris School of Economics. He specialises in demographic economics and has worked on the economic consequences of population ageing and immigration. He is also the director of the Ecole des Hautes Études en Démographie and of the French National Transfer Accounts team. He is also associate editor of the Journal of Demographic Economics, the Journal of the Economics of Ageing and the Public Finance Review. He is a member of the Institut Universitaire de France and Co-President of the Cercle des Economistes