Eurozone Migration is Changing
Uneven Fiscal and Economic Shocks are Driving Higher Rates of Migration
Last week, I analyzed migration in California as a way of exploring how fiscal transfers within political unions can impact migration. This had some pretty clear implications for the Greek situation, which I outlined as well.
But that got me thinking: what about the rest of the Eurozone countries? Have they seen migration shocks comparable to Greece’s? It turns out that they have. As I’ll show, the last decade of economic change in Europe has created tumultuous and unstable patterns of migration. The easy-credit fueled boom of the mid-2000s led to some countries experiencing massive flows of migrants, while the subsequent crash as created a volatile migration reset. Countries with previously low net migration have, in turn, seen large new flows of people.
Eurozone Migration
A Rising Tide of Migrants…
The above chart shows aggregate migration statistics for the Eurozone, based on OECD-provided data, which I have heavily adjusted (please see the proliferation of notes at right if you’re interested in how I did those adjustments). Inflows represent both immigrants from outside the Eurozone moving inside the Eurozone, and migrants within the Eurozone moving from one Euro-country to another. Outflows likewise include both people leaving the Eurozone entirely, and intra-zone relocations. The results tell a fairly clear story.
Migration into, within, and out of the Eurozone is higher than at any time in recent history, even though global migration rates are very close to historic norms.
As is clearly visible, the Eurozone has seen a striking uptick in migration since the early 2000s. Much of this is due to rising immigration from beyond the Eurozone, such as former Soviet states, Africa, Asia, and the Middle East: the expansion of the Schengen Area in 2003 is particularly important in this regard. But a large share of it is also due to intra-Eurozone migration. Brits in Spain, Germans in Greece, and other intra-Eurozone migrant groups became increasingly common during the 2000s as the EU (and the euro) reduced formal and informal barriers to migration.
Eurozone Migration
…But Eurozone Migration Remains Very Low
So migration has grown rapidly. But let’s be clear: it started from a very low base. The Eurozone has about 330 million people, so very similar to the United States in total size. Its combined migration over major internal borders and from the rest of the world came to about 4 million people in 2012, or 1.2% of the population. In the US, the same statistic would be about 5–9 million people, or 2.5–4%, depending on how you define comparable internal borders.
In other words, record-high migration in the Eurozone is still only about half the level of migration in the United States. So when we think about migration in these countries, we need to keep in mind that even very large gross migrant flows by European standards are on the smallish side by US standards. Europe has not yet begun to experience genuinely high rates of internal or international migration. Those high rates continue to be the fairly exclusive territory of “settler” countries like the US and Australia, as well as some rapidly-developing countries or countries with nomadic populations.
Migration into, out of, and within the Eurozone is between 1/3 and 2/3 as frequent as in the United States.
Yet the rapid change in Europe is understandably jarring. Not since the immediate post-war period has Europe experienced this kind of migration, disrupting established systems of government and economic relations.
Eurozone Migration
Changing Net Migration Flows
While I’m talking about all of the Eurozone, the charts I show will all be of Germany and Spain. Germany and Spain both have fairly good reporting of migration data, and they have the largest migrant flows in the Eurozone. Plus, they show the two stories I want to tell in very sharp relief. To explore the data for yourself, see the full visualization.
In terms of net migration, Germany saw strong net inflows in the late 1980s and early 1990s. But by the 2000s, net migration was very low, barely breaking even (and, in 1997, actually going negative). But then suddenly in the 2010s, net migration has shot up again. For Spain, the story is reversed. As a relatively poor country in Europe, Spain saw net out-migration during the 1980s and 1990s. But then in the 2000s, inflows into Spain became quite large, reaching into the hundreds of thousands of net migrants each year. But in recent years, this high net migration as totally vanished, and negative net migration seems like a real possibility.
Spain and Germany represent the two extremes of the Eurozone migration experience.
So how do we explain these flows? Well, I’m not an expert on recent European history, so others may have better answers but my broad impression is as follows. Spain is, on balance, a poorer European country. Germany is generally a richer one. In the 1980s and 1990s, this meant people tended to leave Spain, and go to Germany. But by the late 1990s, as the EU began to integrate more and more deeply, Spain began to experience remarkably rapid economic growth compared to its recent past. In 1999, the adoption of the euro may have accelerated this change as it made credit much cheaper in Spain, fueling rapid growth. So, on balance, Spain became much more attractive, Germany relatively less so, as a result of deepening European integration and resulting convergent economic growth. That’s a recipe for significant chances in migration flows in favor of Spain.
But then, the house of cards came tumbling down. Spain has experienced an extraordinarily deep recession and has lost the benefit of cheap credit implicitly subsidized by German creditworthiness. With a deep recession has come a significant reversion in net migration rates. Spain is now almost certainly a net loser of migrants within the Eurozone, though it continues to attract migrants from beyond the Eurozone. Meanwhile, Germany’s relative economic performance is now much stronger than it was previously. As such, Germany attracts large flows of migrants. Notably, these large flows are probably nearer to market-clearing levels. That is, the high flows to Spain can probably be thought of as distortionary.
So with the net flows established, let’s look at the component parts.
Eurozone Migration
Pulling People In
The above charts show immigration into Germany and Spain. To explore the data, see the full visualization.
Germany’s trend in inflows clearly follows its total trend: and even in low-net-migration years, it still attracted over half a million people. So there’s some real pull factors going on there. Indeed, all through Germany’s low net migration years in the 2000s, inflows were higher than before the 1980s runup. A more integrated Europe not only changed net migration flows, but led to higher gross migration. For Spain, definitive conclusions are harder to reach because the 1980s and 1990s data seems so obviously deficient. But what’s interesting is that even though inflows are similar in, for example, 2003 and 2012, net flows were very different. Spain continues to have some strong pull factors, especially for migrants from outside the Eurozone.
Eurozone Migration
Pushing People Out
What is striking in Germany and Spain is the difference in outflows. German outflows were high in the early 1990s, probably due to adjustments after the reunification of Germany. But since the late 1990s, outflows have been more-or-less constant. Indeed, if anything German outflows increase slightly during the last few years, even as net migration rose. In other words, Germany’s net migration is improving because it is relatively more attractive to outsiders, not because it is getting more attractive for locals. This is a valuable distinction, because outsiders may have fewer roots in Germany, and thus may be more willing to leave if things change in the future. High inflows in one period can easily be high outflows in the next.
For an example, look no further than Spain! During peak inflow years, Spanish outflows remained about constant or fell somewhat. But then, in recent years, outflows skyrocket, especially outflows to other Eurozone countries like Germany, Belgium, Switzerland, and the Netherlands. Many of these emigrants are probably the people who immigrated in the mid-2000s, though others are Spainiards. Spain saw a decline in its ability to attract outsiders and a decline in its ability to retain locals. The result shows up in the net migration data as an extremely rapid decline in net migration.
Eurozone Migration
Where Europe Goes From Here
The EU, and the Eurozone especially, is becoming more integrated. A new generation of Europeans appears to be willing to move within the continent more than in the past, and Europe is attracting a new wave of immigrants from the rest of the world, even as global migration remains mostly unchanged. The result of these changes will be higher migration. There will be more Spainiards in German, Brits in Spain, Poles in France, Romanians in Sweden, etc. What effect this will have on European national cultures is hard to say. But the effect of a rising propensity to migrate may have a very profound effect. If European migration rates rise, it should ease some of Europe’s long-standing labor rigidity. As workers get more used to searching for jobs over borders and envisioning a wider geographic range as their viable economic space for employment, the continent’s ability to moderate unemployment changes should improve, much as is the case in the United States. Overall, migration in Europe remains much lower than in the United States, but that may change in the future. Migration in America is declining while migration in Europe is rising. How this will change the polities and identities of both continents remains to be seen.
See my last post, on migration in California and Greece.
Start my series on migration from the beginning.
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I’m a graduate of the George Washington University’s Elliott School with an MA in International Trade and Investment Policy, and an economist at USDA’s Foreign Agricultural Service. I like to learn about migration, the cotton industry, airplanes, trade policy, space, Africa, and faith.
My posts are not endorsed by and do not in any way represent the opinions of the United States government or any branch, department, agency, or division of it. My writing represents exclusively my own opinions. I did not receive any financial support or remuneration from any party for this research. More’s the pity.
