Finland must triple immigration to maintain labor force: Study

By Al Mayadeen English
Source: Agencies
6 Feb 2023 11:31
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A new study reveals that a higher level of immigration would have a "substantial beneficial influence" on economic growth.

Migrants standing in a queue in Finland. (AFP)

A study conducted by the Finnish Etla Economic Research Institute, a business-backed think tank, showed that immigration to the Nordic country should nearly triple in order to stabilize the number of able-bodied workers.

This would result in an increase in net migration from the current levels of approximately 15,000 to approximately 44,000 individuals each year.

A higher level of immigration, according to the report, would have a "substantial beneficial influence" on economic growth and the sustainability of public finances, especially healthcare and aged care in an aging population.

The present demographic and immigration patterns would cause Finland's working-age population to fall by roughly a fifth by 2070, as per the analysis. Increased immigration is thus viewed as a measure for reducing this negative effect and filling the deficit in tax revenues.

"The biggest problems are related to the financing of the welfare society. The fall in the number of employed persons reduces income from taxes and public fees at the same time as the increase in life expectancy boosts the costs of health treatment and care services," the report said.

It is worth noting that the Etla report did not consider a rise in the birth rate as a viable solution to the country's demographic problems. In 2022, Finland's birth rate was the lowest in more than 150 years, while the mortality rate was at its highest since the 1940s.

The Social Democrats, who lead the current left-wing coalition government, want to increase the number of work-related immigrants to 50,000 by 2030. However, the major opposition party, the nationalist Finns Party, believes that the employment of Finland's existing labor should be improved. According to its most recent immigration policy program, Finland should, as a general rule, refrain from admitting immigrants from non-EU countries unless they have valuable skills.

According to the Etla study, the economic contribution of immigrants with low levels of education is lower than that of educated immigrants, since they tend to rely on subsidies and public programs before they can earn their own tax income. Nonetheless, it saw even low-skilled immigration as advantageous in the long run.

Previously, the Consultancy for Regional Development (MDI) reached similar results, emphasizing that a falling population, along with an increase in senior groups with specific healthcare needs and a decline in the number of taxpayers, all necessitate increasing labor immigration in Finland.