Why Does Eastern Europe Reject Immigration?

10/12/21 08:28AM EDT

Below is a complimentary Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

Why Does Eastern Europe Reject Immigration? - 10 12 2021 8 23 35 AM

Central European leaders have signed a joint resolution saying no to immigration as a way to raise birthrates. This took place at the Budapest Demographic Summit, where leaders also railed against LGBTQ identities and abortion rights. (Reuters)

NH: Last week, we wrote about Latvia’s struggles with population decline. (See “A Case Study in Population Decline: Latvia.”) We explained why Latvia's demographic strategy expressly does not include more immigration to boost the population. 

Latvia isn't alone in this no-immigration approach. At the end of September, leaders from Hungary, Slovenia, Czechia, Serbia, and Bosnia and Herzegovina (B&H) gathered together at the Budapest Demographic Summit.

Each of these countries has a TFR well below replacement (2.1). But the leaders all signed an agreement that immigration should not be used to counteract population decline.

Instead, they announced, Europe should focus its attention on raising fertility rates. 

Why Does Eastern Europe Reject Immigration? - Imm 1

Many Americans and Western Europeans are mystified by these countries' anti-immigration rhetoric. Why fan the flames of nativism when their population problem might be solved, at least partially, by more immigration rather than less?

To understand what's going on, we have to back up and look at the situation from their point of view.

First, let's confront one level-setting fact: These countries are relatively poor.

Per-capita GDP in Serbia and  B&H is about $6K. In Hungary it's $17K. Czechia and Slovenia--the so-called "Germany" and "Switzerland" of Central Europe, respectively--are at the high end, at $23K and $26K. (In Latvia btw it's $18K.)

Now compare that to France, Germany, or Scandinavia, where per-capita GDP ranges from the $40ks and $50ks to the mid-$60ks. So we're looking at wages in the eastern countries that are only 20% to 60% of equivalent wages in the richer western countries.

This fact prompts a question: What keeps families in the eastern countries from moving to the more affluent west where they could hope to earn a lot more, either with or without higher educational credentials?

Not much, it turns out.

After the fall of the Soviet Union, when emigration barriers were lifted, millions streamed from east to west. Later, after most of these counties gained entry to the EU and the Schengen quotas were lifted, there followed another human tide pushing from east to west.

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Note the huge exodus that hit these countries in the early-1990s, in the wake of the Soviet breakup and the Balkan civil wars.

And the renewed net outflow in the wake of the GFC, when all but two of these countries were within the EU Schengen zone. 

This points to a fundamental difference between, say, the United States and Sweden versus Hungary and Romania on the prospect of population decline--and to why the challenge is so much more daunting in the poorer east than in the more affluent west.

In the west, it's a long-term problem generated by fertility decline. In the east, it's a short-term and a long-term problem generated by both fertility decline and significant net out-migration.

Once net migration moves below -2 per thousand, it becomes a larger and more immediate challenge than low fertility. It hurts employment immediately. It also takes away future potential births.

Moreover, rising out-migration, unlike low fertility, can create a vicious cycle of declining confidence, slower economic growth, and ever-less enthusiasm about staying.

Most countries facing steep population decline understand this perfectly well, which explains why emigration in these countries is typically a bigger popular worry than immigration. See this survey from the European Council on Foreign Relations

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The pressing threat of out-migration creates one urgent need in these countries unfamiliar to most westerners. Before national leaders do anything else, they have to persuade native citizens that there are good reasons to stay.

And if the material advantages aren't there, you need to appeal to immaterial advantages--like patriotism, cultural ties, national solidarity.

You need to create a national brand worth protecting and preserving: Hungary for Hungarians, Poland for the Polish, Latvia for Latvians.

Cue here folk festivals and national holidays and the celebration of ancestral myths. These you will miss if you move to join a bank in the UK or a factory in Bavaria.

So far, so good. But you can probably appreciate how this branding doesn't sync well with a pro-immigration campaign.

If you are actively encouraging even poorer people of a very different culture to immigrate for economic reasons, how can you also persuade your own people to stay for non-economic reasons?

It's not just that Syrian refugees may render Hungary less "Hungarian" (whatever that may mean), it's also that what they want (higher wages and a new life) clashes with how you're motivating your own citizens to stay.

Even more demoralizing is the tendency of new immigrants to poorer EU countries to move on to richer EU countries after being naturalized.

Hungary experienced a lot of such "stepping stone" migration in the late 1990s and 2000s. Estonia is trying to crack down on it today. If someone immigrates for economic reasons, after all, they are just as likely to emigrate for economic reasons.

I don't want to impute any lofty motives to the populist governments that signed the anti-immigration agreement at the end of their Budapest Demographic Summit.

Their populist appeals are often couched in nativist and bigoted language and are designed to win votes as much as to justify a far-sighted demographic strategy.

I do want to suggest that these governments don't enjoy the same options as the more affluent western democracies. Policymakers in London, Paris, and Stockholm face very low rates of emigration (or re-emigration) and can be as selective as they wish to be in accepting newcomers.

The world--and the future--looks very different to policymakers in Belgrade, Sarajevo, Riga, or Ljubljana.

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ABOUT NEIL HOWE

Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.

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