Labour migration as a solution to an ageing population?

Labour migration is often mentioned as a way to mitigate the impact of ageing in wealthy societies. This article analyses the impact of labour migration on the welfare level and old-age dependency ratio of a prosperous ageing country, the Netherlands. If labour migrants are considered to be part of the population of the host country, they only contribute to a higher welfare level if their productivity is higher than per capita GDP. If they stay permanently and form a family, their productivity will need to be higher than the average labour productivity of the incumbent workforce. Labour migrants will mitigate the rise of the old-age dependency ratio, but only if they only stay in the host country temporarily. Therefore, only selective and temporary labour migration will relieve the ‘burden’ of an ageing society.