Scotland’s Demography Poses an Economic Challenge- Increased Immigration is a Solution

It is of vital importance that the Scottish Government is given a degree of control over immigration policy, a new report has found.

The report, by Scottish think tank the David Hume Institute, discusses the impact that Scotland’s ageing population has on the economy, with low numbers of working-age citizens resulting in labour shortages. The authors forecast that if levels of inward migration are not increased, the problem is set to intensify further. According to the report’s predictions, Scotland’s working-age population will have only increased by 38,000 by the year 2041. In contrast, the number of people of pensionable age is set to have increased by 265,000 over the same time period.

Such figures offer valuable insight into the irregular nature of Scotland’s demographics.

A major driving force behind Scotland’s dwindling working-age population is its birth rate, which is one of the lowest in the developed world.

This results in the average age of the domestic population being higher than that of comparative countries, something that can have a profoundly negative effect on the economy. Those of pension age are less economically active and often dependent on some form of social support. Not only this, but a small working-age population stunts economic growth by creating labour shortages, meaning that some sectors of the economy have insufficient numbers of workers to function effectively.

A simple way of remedying this situation is by increasing levels of immigration. However, levels of immigration into Scotland- which are already lower than England- have dropped dramatically in recent years. In addition, net migration from overseas to the UK is set to fall considerably in the near future. This is largely due to the impact of Brexit, but the unique demographic situation in Scotland would continue to pose an economic challenge regardless.

A major driving force behind Scotland’s dwindling working-age population is its birth rate, which is one of the lowest in the developed world.

scotland economic challenge
Scotland’s unique demography necessitates greater control over economic policy [Image: TravelBlog]

It is for this reason that the David Hume Institute believe that Scotland should exert more control over their economic policy. The report states that part of the solution will come from future technological change and from enabling more people of working-age to enter the labour market. Irrespective of this, its authors insist that immigration must still be a priority. Certain sectors of the Scottish economy are dependent on foreign workers, such as the retail and leisure industries. With already low levels of immigration set to fall even further, it is areas such as this that could experience severe difficulties.

What does the report suggest should be done to address the situation?
  1. The Scottish Government should be given greater powers over attracting and selecting immigrants in to the country. This will enable the low working-age population to be addressed, as foreign nationals are on average younger than the domestic population. Furthermore, it will enable skilled migrants to be selected in accordance with the industries that are experiencing particularly acute labour shortages.
  2. A closer working relationship between the Scottish and UK Governments should be encouraged. There is a further recommendation for Scots living abroad, including in other parts of the UK to return home.
  3. The Canadian method of delegating control over immigration policy should be looked at. Canada gives individual provinces the ability to control immigration depending on their economic needs.
Scotland immigration challenge
Greater collaboration between Holyrood and Westminster is encouraged
[Image: Michelle Mabelle
]

Certain sectors of the Scottish economy are dependent on foreign workers, such as the leisure and retail industries.

Jane-Frances Kelly, the director of the David Hume Institute, said ‘We are sounding a warning signal for Scotland’s politicians and policymakers.’

‘We need to get to grips with the coming demographic crisis or Scotland’s economy will be severely affected’.

The report’s findings were well received by Europe and Migration Minister Ben Macpherson:

‘It is very welcome that the David Hume Institute report recognises the need for Scotland to be able to set its own migration policy.’

[Header Image: PinkSaltire]

Written by
Cameron Boyle
Join the discussion

1 comment