Immigration policy and demographic change in Scotland: learning from Australia, Canada and continental Europe

Executive Summary

The Context: population change, mitigation & adaptation

Industrialised countries have undergone fundamental population changes over the past decades: declining fertility and rising life expectancy are generating ageing populations, and, in some countries, overall population decline. While trends in overall population growth vary across (and within) countries, population ageing will be a challenge to all industrialised countries, and will necessitate fundamental adjustments to their economies and societies. In Scotland, following decades of population decline caused by the out-migration of young adults, the country enjoyed significant population growth in the first two decades of the twentieth century. However, fertility rates in Scotland are among the lowest of OECD countries (along with East Asia and Southern Europe). 

Population decline and ageing can create three types of ‘shortage’:

• Aggregate shortage, associated with overall labour shortages and high old age dependency ratios. 
• Sectoral shortages, linked to specific occupations or sectors.
• Geographic shortages in particular areas, typically post-industrial, remote and rural communities.

Industrialised countries have sought to address these effects through a combination of mitigation (influencing demographic trends); and adaptation (changing systems to offset the effects of population change). Mitigation measures include family policies to increase fertility rates, as well as policies to attract in-migration, especially to sectors and occupations facing shortages. Adaptation measures have included measures to encourage longer working lives, active ageing, labour force activation, as well as support for training or reskilling. National and local governments have sought to address geographic shortages through encouraging population retention and internal migration, or through ‘smart shrinkage’. 

European governments have tended to prioritise these types of social policy interventions above immigration policy, given the social and political sensitivities frequently associated with immigration. Indeed, the notion that ‘replacement migration’ could fully mitigate population ageing has been widely viewed as unfeasible, given the scale of net in-migration that would be required. For example, Expert Advisory Group calculations suggested that Scotland would need a large number of migrants annually to retain current dependency ratios.^[1] However, immigration can be an effective and efficient means of mitigating all three kinds of shortage, as part of a wider package of measures. 

Immigration programmes

We analyse a range of immigration programmes that can help address the three types of shortages identified above, classifying them across two features:

i. Programmes may select entrants based on specific job vacancies or shortages (employer-based); or the characteristics of those being admitted (human capital based).

ii. Programmes may offer expansive rights and pathways to settlement, oriented towards promoting permanent stay; or they may restrict these rights, in order to encourage temporary migration and return.

Australia and Canada both have regionally differentiated points-based systems. They have traditionally been based on human capital schemes, but increasingly build in employer-based considerations. They offer extensive rights and pathways to settlement. We analyse an example of a regionalised immigration programme for each country. In addition, we analyse Canada’s recent Atlantic Immigration Pilot Program to promote retention in remote areas, which is of particular relevance to Scotland. 

We then analyse two European programmes. Most European countries have adopted employer-based programmes, on a spectrum from restrictive to expansive rights. Those most relevant to addressing shortages created by demographic change are programmes that encourage longer-term settlement, and which span a range of occupations and skills levels. We focus on two such schemes: the Spanish Catalogue of Hard-to-Fill Occupations, and the Swedish 2008 Immigration Law. The Spanish scheme also allows differentiation in shortage lists across provinces, thereby addressing geographic shortages. 

Through these five case studies, we distil the following insights:

The importance of job offers: Australian and Canadian systems have increasingly acknowledged the importance of a job offer, to promote labour market integration and encourage settlement, especially in remoter regions.

Rights and retention: Even where entry is conditional on a specific job or place of stay, over time migrants’ rights expand, implying the ability of the programme to influence choice of job, occupation, or location reduces. Different systems manage this transition from stricter requirements to more autonomy in different ways. For example, in Sweden the first 2 years are linked to a specific job; followed by 2 years with scope for more job mobility. In Australian regional schemes, there is a requirement of 2 years’ residency in the region (including 1 year of employment), before accessing permanent residence. However, it is noteworthy that Australia is now switching to a longer (5-year) residency requirement for regional schemes.

Promoting settlement: Beyond the types of conditionality discussed above, schemes can encourage longer-term settlement in particular regions in two ways. (1) Through weighting their selection criteria to those most likely to stay in the region (as in Canadian Provincial Nominee Programs); or (2) through working with employers and local community organisations to develop a support package to facilitate settlement (as in the Canadian Atlantic Immigration Pilot Program). 

Regional differentiation: Schemes may seek to address geographic shortages through direct or indirect differentiation:

Enforcement: The schemes carry different challenges in relation to enforcement.

• Complexity: the more variegation allowed within a scheme, the more complex it can be for employers and migrants to navigate, and for public authorities to enforce.
• Sponsorship: schemes that allow more mobility for migrants (across job, occupation or place) are more difficult to accommodate within a sponsorship system.
• Vulnerability: schemes that are not conditional on employment can create risks for migrants in terms of unemployment, irregular status, and destitution. These risks may be higher in sectors associated with more casual and informal work.