How reducing differentials in education and labor force participation could lessen workforce decline in the EU-28

Abstract

BACKGROUND Population ageing is unavoidable in Europe, but perhaps its impact on labor force is not. In the context of a new demographic regime of high immigration and low fertility, differentials in labor force participation and educational attainment can be more consequential for the labor force than either the number of immigrants or structure of the overall population. OBJECTIVE The objective of this paper is to investigate how improvements in both educational attainment (especially among children with a low educated mother or an immigration background) and labor force participation (especially of women and immigrants) could impact the future labor force in the European Union. METHODS We used a microsimulation model called CEPAM-Mic to project the labor force of EU28 countries. CEPAM-Mic incorporates heterogeneity among different groups and allows the development of alternative scenarios concerning educational attainment and labor force participation of disadvantaged groups. RESULTS Removing inequalities between subgroups in educational attainment and labor force participation drastically changes the prospective labor force size and labor force dependency ratio (LFDR) in the EU. Assuming perfect equality, the anticipated decline

Introduction

“…This model allows for the study of alternative scenarios of migration and their consequences on future populations and labour supply trends in the European Union. It has been used to assess policy-relevant scenarios with regard to sociocultural inequalities in education (Marois et al 2019a), and integration of immigrants (Marois et al 2019b), as well as to propose an innovative dependency ratio that takes into account the productivity of workers (Marois et al 2020). CEPAM-Mic allows researchers to assess a large range of policy-relevant alternative scenarios and produce indicators showing that population aging is less daunting than it may seem when only age structure is considered.…”

Ravenstein Revisited: The Analysis of Migration, Then and Now

“…However, many more attributes are important in migration processes. These include health status (Wallace/Kulu 2014), labour force status (Marois et al 2019a), family status (Mulder 2018), educational attainment (Bernard/Bell 2018), motivations (Coulter et al 2011) and ethnic status (Darlington-Pollock et al 2019). Such attributes have been investigated using census microdata or survey data.…”

“…The links between education and migration were largely ignored in Lutz et al (2014). In recent work for the European Commission, Marois et al (2019aMarois et al ( /b, 2020 use a large microsimulation model of the European population to connect international migration to the attributes of individuals in the sample microdata in order to assess whether the negative economic consequences of population ageing can be mitigated through higher immigration, higher labour force participation and better integration of new arrivals into the labour force. They fi nd that policies that raise labour force participation rates at older ages, that encourage women to enter the labour market and that promote integration of foreign workers will reduce the increase in the economic dependency rate and mean that immigration levels need not be higher than today.…”

Bayesian Probabilistic Population Projections for France

“…This self-reinforcing mechanism has a positive impact on average levels of education but might also increase the dichotomy between the lowest -with little chance of moving up -and highest educated in the society. 12 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 2100 0 2 4 6 8 10 12 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095 consequences of population ageing in the countries of the European Union (Marois et al, 2019).…”