Much of the world is facing a demographic crisis with ageing populations and falling fertility rates ramping up pressure on workforces, tax income and support systems for the elderly, a new report says.

The report, from the Washington-based Migration Policy Institute and titled ‘Population Aging Is Here’, says the scale of the change is now visible well beyond the wealthy countries that have histories of grappling with ageing populations.

“China’s annual births have fallen to levels not recorded since 1949, and comparable declines are underway in countries across Latin America, the Middle East and North Africa, leaving many countries old before they grow rich, with shrinking workforces and rising costs for pensions and health care,” the report says.

It says that while immigration can’t solve the issue of population aging, it can play a more effective role in a broader demographic strategy.

The report sets out several principles for better leveraging immigration, including prioritising the skills and career stage of arriving immigrants; treating integration programming, including language training, as an investment rather than a cost; folding immigration into the same long-term planning governments already apply to pensions, housing and infrastructure; addressing pension gaps for aging immigrants through portable retirement funds; and ensuring immigration narrows rather than widens global inequality by investing in skills partnerships that connect training, mobility and local development.

It also cautions against assuming artificial intelligence can quickly substitute for immigration.

The report says that prioritising high-earning migrants may be difficult given rising low-skilled labour shortages in sectors such as elder care, agriculture, hospitality and construction, which remain largely resistant to near-term automation. It says governments will need to prioritise those with flexible skills.

“While immigration cannot solve population aging, it can be a useful demographic and economic lever—if it is employed more effectively,” the report says.

“The next few years will provide a real-time experiment in the success of policies that prioritise immigration versus other economic levers to help countries navigate population aging, including extending retirement age, investing in productivity advances and reforming social security systems. Different models are already taking shape.”

The report sets out five general principles:

Human capital matters more than a headcount. 

Each worker shoulders a higher fiscal burden in an aging society with a small workforce. As a result, the composition of arriving migrants—skills, earning potential, sector alignment, career stage—will increase in importance. This means prioritising the admission of high earners or younger workers with longer careers ahead of them and investing in credential recognition so that immigrants can work at their skill level.

Integration is a productivity multiplier. 

The role of integration, rather than immigration, policies in meeting labour shortages is often overlooked. In the Netherlands, three-quarters of current vacancies could be filled if migrants participated in the labour market at the same rate as the native born. Language training, job counselling, subsidized work experience, and bridging programs can all allow newcomers early access to work while also enabling subsequent upskilling. As such, some countries’ decisions to cut integration budgets at precisely the moment labour shortages are biting is a false economy.

Population planning is economic planning. 

Immigration is often siloed off from housing, infrastructure, and pension policy, and rarely is part of long-term planning. For instance, Spain’s recent demographic recovery plan lists 130 measures to address aging and regional decline without a single reference to migrants or integration, even as the government is expanding migration for demographic reasons. But other countries, such as Korea, are starting to build immigration into population plans, alongside pro-natalist policies. More governments could learn from the migration levels planning processes that Australia and Canada have developed, however imperfectly, both to better integrate immigration with fiscal sustainability and pension projections and to properly resource housing and infrastructure expansions associated with population growth.

Immigrants age too. 

Destination countries are now grappling with a rising population of immigrant retirees, including some lacking legal status in the country, and many are reaching retirement age without a pension or health care. Among migrants who do return to their country of origin after working abroad, many lose access to pension entitlements due to fragmented contributions or lack of portable benefits. Temporary migration programs may appear to solve the problem for destination countries, but they effectively offshore the costs of aging onto lower-income origin countries. Instead, countries should explore ways to share the burden for retirement more equitably, including by giving migrants autonomy over their own retirement funds.

Immigration policy should reduce rather than entrench global inequality. 

Many low-and middle-income countries that send significant numbers of workers to high-income countries are rapidly aging too, which will intensify concerns about brain drain. This also points to a growing need for origin countries to capitalize on diaspora engagement and prioritize worker retention in sectors such as health care. Meanwhile, sub-Saharan Africa will generate the majority of global population growth in coming decades, but capturing that demographic advantage requires connecting development investment to mobility pathways.

Read the full report here: www.migrationpolicy.org/publication/population-aging-immigration-half-answer.