Demographic Transition and Migration: Impacts on Economies
Demographic Transition
The starting point is usually a situation of stationary population growth, despite the high birth rates (low life expectancy) and the high mortality due to the inadequacy of food resources and health care. Economic development tends to be linked with the improvement of agricultural productivity and health conditions, resulting in a drastic reduction in mortality rates. This change originates the “demographic explosion”. Explosive population growth tends to follow a logistic curve which begins with a slow rate. High birth rates in the initial stages of demographic transition are due to a constellation of circumstances, from cultural or health reasons to economic motivations (children). The reduction of the mortality rates often coincides with the beginning of the demographic transition and is explained in the initial stages of development by the overcoming of famines and improvements in basic sanitary conditions. At a later time, the reduction of mortality is made possible through the generalization of advanced health and hospitalization programs. As economic development progresses, birth rates tend to decline and, in the absence of immigration, the population enters a stationary demographic situation. Birth rates fall because of reasons such as the increase in the costs of maintenance of large families and the incorporation of women in the labor market.
Strong population growth may alter the relationship between the resources of an economy and the individuals who enjoy them, which often causes problems like migration and urbanization disorders, unemployment, and famine. The problem of explosive population growth was denounced by Malthus who pointed out that population growth introduced a progress trap that will bring famine. The relationship between population growth and economic activity varies depending on: if there’s an excessive population density in relation to the development level, poverty and inequality will hold back economic progress; the emergence of agglomeration economies facilitates the construction of adequate transport and communication infrastructures.
Migration Movements
People move to improve their living conditions and employment. These processes have been intensified in recent decades as a result of the major differences in living standards between regions and the rapprochement between geographical areas. The differences in the demographic rhythms of developed countries (aging populations, low fertility rates, and a forecast of shortages of workforce) and developing countries (high birth rates, young population, low employment opportunities) act as an intense and permanent impulse to emigration. Migratory flows are not higher because of the barriers set by developed countries trying to prevent social tensions. The political obstacles to migration rise when cultures are very different or it’s difficult to assimilate the culture and customs of the country of destination, circumstances under which the creation of ghettos could be a natural consequence. In the same sense, more rejection to immigration will appear if the host country is not able to create enough employment. One important economic advantage of migrants for the recipient country is that they increase the supply of labor. It is also improved the flexibility of the labor markets in the receiving countries, since migrants contribute to eliminate bottlenecks in the labor market. This effect will be of growing importance in the future since it will reduce the number of people contributing to finance their welfare systems. Also, the minor geographical and family ties allow migrants to increase their mobility and adjustments in the labor market in times of recession can be facilitated by returning to their origin countries. The competition for work that migrants introduce has a downward effect on the wage level of the economy, which enhances competitiveness and job creation. In addition, income from remittances is an important source of external financing. On the negative side, the problem of brain drain could seriously harm economic development, since the first who tends to emigrate is the best-trained, the risk-takers, and those with entrepreneurial activities.