Eurozone Migration

Changing Net Migration Flows

While I’m talking about all of the Eurozone, the charts I show will all be of Germany and Spain. Germany and Spain both have fairly good reporting of migration data, and they have the largest migrant flows in the Eurozone. Plus, they show the two stories I want to tell in very sharp relief. To explore the data for yourself, see the full visualization.

In terms of net migration, Germany saw strong net inflows in the late 1980s and early 1990s. But by the 2000s, net migration was very low, barely breaking even (and, in 1997, actually going negative). But then suddenly in the 2010s, net migration has shot up again. For Spain, the story is reversed. As a relatively poor country in Europe, Spain saw net out-migration during the 1980s and 1990s. But then in the 2000s, inflows into Spain became quite large, reaching into the hundreds of thousands of net migrants each year. But in recent years, this high net migration as totally vanished, and negative net migration seems like a real possibility.

Spain and Germany represent the two extremes of the Eurozone migration experience.

So how do we explain these flows? Well, I’m not an expert on recent European history, so others may have better answers but my broad impression is as follows. Spain is, on balance, a poorer European country. Germany is generally a richer one. In the 1980s and 1990s, this meant people tended to leave Spain, and go to Germany. But by the late 1990s, as the EU began to integrate more and more deeply, Spain began to experience remarkably rapid economic growth compared to its recent past. In 1999, the adoption of the euro may have accelerated this change as it made credit much cheaper in Spain, fueling rapid growth. So, on balance, Spain became much more attractive, Germany relatively less so, as a result of deepening European integration and resulting convergent economic growth. That’s a recipe for significant chances in migration flows in favor of Spain.

But then, the house of cards came tumbling down. Spain has experienced an extraordinarily deep recession and has lost the benefit of cheap credit implicitly subsidized by German creditworthiness. With a deep recession has come a significant reversion in net migration rates. Spain is now almost certainly a net loser of migrants within the Eurozone, though it continues to attract migrants from beyond the Eurozone. Meanwhile, Germany’s relative economic performance is now much stronger than it was previously. As such, Germany attracts large flows of migrants. Notably, these large flows are probably nearer to market-clearing levels. That is, the high flows to Spain can probably be thought of as distortionary.

So with the net flows established, let’s look at the component parts.

Eurozone Migration

Pulling People In

The above charts show immigration into Germany and Spain. To explore the data, see the full visualization.

Germany’s trend in inflows clearly follows its total trend: and even in low-net-migration years, it still attracted over half a million people. So there’s some real pull factors going on there. Indeed, all through Germany’s low net migration years in the 2000s, inflows were higher than before the 1980s runup. A more integrated Europe not only changed net migration flows, but led to higher gross migration. For Spain, definitive conclusions are harder to reach because the 1980s and 1990s data seems so obviously deficient. But what’s interesting is that even though inflows are similar in, for example, 2003 and 2012, net flows were very different. Spain continues to have some strong pull factors, especially for migrants from outside the Eurozone.

Eurozone Migration

Pushing People Out

Explore other countries.

What is striking in Germany and Spain is the difference in outflows. German outflows were high in the early 1990s, probably due to adjustments after the reunification of Germany. But since the late 1990s, outflows have been more-or-less constant. Indeed, if anything German outflows increase slightly during the last few years, even as net migration rose. In other words, Germany’s net migration is improving because it is relatively more attractive to outsiders, not because it is getting more attractive for locals. This is a valuable distinction, because outsiders may have fewer roots in Germany, and thus may be more willing to leave if things change in the future. High inflows in one period can easily be high outflows in the next.

For an example, look no further than Spain! During peak inflow years, Spanish outflows remained about constant or fell somewhat. But then, in recent years, outflows skyrocket, especially outflows to other Eurozone countries like Germany, Belgium, Switzerland, and the Netherlands. Many of these emigrants are probably the people who immigrated in the mid-2000s, though others are Spainiards. Spain saw a decline in its ability to attract outsiders and a decline in its ability to retain locals. The result shows up in the net migration data as an extremely rapid decline in net migration.