Week 33, 2017: GDP per Capita v.s. Net Migration

   

Summary:

This chart plots 31 countries according to the level of GDP and net migration relative to their populations. The trend line shows that countries with higher GDP per capita are typically experiencing higher rates of net migration per 1000 population. Norway sits high on both metrics, due to a range of factors. With a small population and relatively strong economy, Norway has successfully exploited its own natural resources and carefully managed the proceeds via a sizeable sovereign wealth fund. These factors, coupled with high tax rates, enable Norway to boast one of the most progressive and generous welfare systems in western Europe. The top right of this chart also houses other Northern European countries Sweden, and Iceland. These countries have medium to strong economies and social services, as well as low populations. Another in the top right is Ireland, which experienced its first year of positive net migration since 2009, perhaps a product of the tax breaks and grants being issued by the government to attract companies.

There is a selection of primarily European nations, alongside Japan, Australia and Canada in the centre of this chart with GDP per capita between $25,000 and $50,000, each with positive net migrations. This is excluding Japan, where net migration is zero. Japanese net migration is an interesting case likely due to a historically stringent entry policy. The next closest country to have net migration as low as Japan is Poland. However when considering GDP per capita, this is over three times lower in Poland (Japan GDP per capita is $38,894 versus Poland’s which is $12,372). Japan’s history of isolationism has caused immigration to be seen as culturally taboo, with few politicians prepared to risk political capital on the issue. 

In 2016, non-Japanese citizens made up only 1.4% of Japan’s total workforce, whereas according to the IMF, most advanced economies operate at over 5%. Critics believe this reluctance to relax immigration policy is detrimental to Japan’s economy, as its ageing population and low birth rate mean that many business owners are struggling to fill jobs. However, PM Shinzo Abe has made it clear that he will not open the country up to permanent residency for unskilled labourers. 

Spain has the highest net migration rate, as well as the lowest GDP out of these countries, with an estimated 8 people moving there per 1,000 residents, despite an unemployment level that is very high, particularly among the young.  Spain’s high net migration is possibly related to its proximity to the Mediterranean, a route via which many migrants, refugees and asylum seekers attempt to gain access to Europe. It may also reflect its historical colonial reach and the dominance of its language, something that engenders both a cultural link and eases the potential difficulties of integration for prospective migrants.

Of the countries with GDPs per capita less than $25,000, only four of the 16 countries featured have positive net migrations. The remainder, primarily countries of Africa, Eastern Europe and Asia, are a tightly clustered group with GDP per capita of less than $12,500 and net migrations at or below zero.

What does the chart show?     

The chart shows the estimated net migration per 1,000 people in 31 countries measured on the y-axis. Measured against the y-axis is the GDP per capita of these countries. Both of these figures are obtained from 2016 and GDP per capita is in US dollars. The trend line shows a positive relationship between these two metrics.

Why is the chart interesting? 

Immigration remains one of the most divisive and controversial issues in recent European elections. Increased pressure from the refugee crisis in North Africa and the Middle East has driven changes to the immigration policies of many nations. One example is Norway, where in 2016 the government implemented stricter border checks, and beginning the deportation of asylum seekers arriving from a ‘safe third country’, as well as the offer of financial incentives for migrants to return to their homes. This meant that in the first four months of 2016, Norway had accepted the lowest number of asylum seekers since 1997.  

Other European countries have taken yet more hard-line approaches towards those seeking asylum, particularly those in Central Europe, such as Hungary and Poland. Hungary’s populist PM Viktor Orbán has led the charge, although the European Commission has begun legal action against 3 of the Visegrad nations over their immigration policies which the Commission claims contravene a relocation plan forced through by the western EU powers, demanding that member states accommodate their share of 120,000 refugees. For comparison, Hungary granted asylum to 425 refugees, whereas Germany took in 280,000 asylum seekers.

Although the ability of a state to accommodate and support new citizens no doubt plays a role in the attraction of migrants and refugees, research shows there is often a complex interplay of a myriad factors in these decisions. A whole range of factors exist, each having contrasting implications on decisions including: migrants’ linguistic ability, pre-existing family ties and/or established communities, perceptions of opportunity vs racism and former colonial ties.