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July 2012, Volume 19, Number 3

OECD: Migration Outlook 2012

The OECD released its 36th annual report on international migration in June 2012. The report reviewed trends in international migration since the end of the 2008-09 recession, the status of migrants in the labor markets of host countries, and migration data and policy developments in the 34 OECD countries and several non-member countries. Two special sections covered the role of migration in dealing with aging work forces in industrial countries and the role of Asia in international migration.

Most OECD countries have three distinct migration doors or inflows, family unification, employment, and humanitarian. Settler or permanent immigration fell only slightly during and after the 2008-09 recession, since many were joining relatives settled abroad. Economic and humanitarian migration also fell only slightly. The major impact of the recession was on temporary labor migration, as employers requested fewer guest workers, and it was most visible in labor migration within the free-movement EU, where the number of registered intra-EU labor migrants fell by a third.

In most OECD countries, unemployment rates for foreign or foreign-born workers are higher than for native-born workers. In the US, the foreign-born unemployment rate was only slightly higher than the US-born rate in 2011, 9.1 percent compared to 8.9 percent, but in Europe the ratio between foreign-born and native-born unemployment rates is often two to one, for instance, 20 percent for foreign-born and 10 percent for native-born. The rates for foreign- and native-born youth are even higher.

The OECD emphasized that immigration accounts for a high and growing share of labor force growth in OECD countries. In Europe, immigrants accounted for almost three-fourth of net labor force growth and in the US almost half of labor force growth; many of the natives joining the labor force replaced natives who retired.

Lessons. The main findings were summarized as follows. Labor migration is primarily an employer-led process, meaning that migrants respond to job offers, so that fewer move over national borders when unemployment rises. Second, strict labor laws can limit the hiring of migrants even if there are few controls over entries, as demonstrated in Sweden, where employers have been relatively free to hire migrants since 2009.

Third, the OECD urges caution on feed back loops, as when migrants are hired to build housing for migrants. During recession, there can be a major drop in employment, as in Ireland and Spain. Fourth, supply- or points-selection systems are not always capable of ensuring that foreigners selected for their youth and education get jobs that use their skills. Australia and Canada have recognized the problem of underemployment or "brain waste" by adding points for foreigners seeking immigrant visas who have Australian and Canadian work experience and a job offer.

Fifth, employer-driven labor migration systems essentially allow employers to select both workers and citizens. If employers exhibit a preference for Asians, for example, their hiring decisions can change the demography, culture, and other features of receiving areas. Such effects are especially evident in, for example, small Midwestern towns with meatpacking plants that hire Hispanic immigrant workers.

Data. The OECD estimated that settler immigration into 23 OECD countries and Russia was 4.1 million in 2010, including about 800,000 persons changing countries within free movement areas such as the EU and ANZ (Norway and Switzerland draw migrants from the EU, and Australia from New Zealand). A quarter of immigrants in 2010 arrived in the US, followed by 414,000 in the UK, 332,000 in Italy; 300,000 in Spain; and 281,000 in Canada.

This migration had three major components, 36 percent family migration, 21 percent labor migration (plus 11 percent family members of labor migrants), 20 percent free-movement migration, and six percent humanitarian (the US is unique among OECD countries in having family migration be about 70 percent of the inflow).

Temporary labor migrants, 1.9 million in 2010, outnumbered settler labor immigrants, 1.4 million. The largest category was seasonal workers, some 520,000, followed by working holiday makers, 400,000, suggesting that most temporary workers are abroad only a short time. The US admitted the most temporary workers in 2010, some 470,000, followed by 340,000 to Germany and 275,000 to Australia. Japan received two-thirds of the 85,000 trainees admitted to OECD countries in 2010.

There were 2.6 million international students. The leading destinations were the US with 660,000; the UK with 370,000; Australia with 260,000; and France with 250,000. China sent 455,000 students to OECD countries, followed by India 180,000, and Korea, 120,000. A third of international students are enrolled in business and social sciences, while almost 30 percent are enrolled in engineering and science.

Immigrants were an average 13 percent of the residents of OECD countries; the highest immigrant or foreign-born shares were in Switzerland with 27 percent; Australia with 27 percent; and Israel with 24 percent; New Zealand with 23 percent; and Canada with 20 percent.

Employment. Foreign-born workers were hit hard by the 2008-09 recession for several reasons, including the fact that many were last hired and first fired and that many were employed in construction and other hard-hit sectors. The unemployment rates of foreign-born workers rose more than for native-born workers in almost all countries except Switzerland.

The impacts of recession on migrant unemployment are influenced by several inter-related variables, including sex, as women are more likely to work in care services and less likely to work in construction, education level and country of origin. Women employed in personal care services were more protected from unemployment than men employed in manufacturing and construction.

More migrants are entering occupations where employment is declining, such as agriculture, than where employment is increasing, such as health care. In the US, 28 percent of immigrants entered declining occupations while 22 percent entered expanding occupations. In Europe, 24 percent entered declining occupations and 15 percent expanding occupations. The share of college-educated immigrants is highest in Canada, where over 50 percent of immigrants have college degrees (tertiary education).

Foreign-born and second-generation youth 15 to 24 were especially hard-hit by the 2008-09 recession. Those in the labor force were likely to be unemployed, often having unemployment rates twice as high as native youth. Those with jobs often have part-time or other types of jobs that do not assure security. Many migrant youth are in NEET status, meaning they are not in education, employment or training.

The share of 15-24 year olds in NEET status is between 15 and 30 percent in Italy, Greece, and Spain. Among OECD countries, Turkey has the highest NEET rate, over 50 percent of 15-24 year olds are not in education, employment or training.