Immigration in an uncertain world

Immigration in an uncertain world

Migration debates are politically charged and often seen as an economic threat. But in a world of instability and labour shortages could immigration be part of the solution?

Andreas Ferrara, Associate Professor at the University of Pittsburg and CAGE Research Associate writes about talent, politics, and immigration as a vital asset to the future of western economies.

When people think of immigration, they often picture crowded boats of refugees, or headlines about undocumented workers crossing borders. This image, while partly accurate, misses a crucial part of the story: most of the immigration to Western countries is regular and many Western economies gain from immigration. High-skilled workers and international students are crucial to knowledge creation, technological development, and growth. Yet, these two groups are highly sensitive to the winds of economic and policy uncertainty: when they sense risk — be it political hostility, unstable labour markets, or tightening visa regimes — they simply go elsewhere or remain in their home countries.

Unskilled immigrants are not only in search of better lives, but they also often take on jobs that many native workers would not consider, from harvesting crops to cleaning hotels and caring for the elderly. As Western nations grapple with ageing populations, growing competition for global talent due to technological progress and the AI race, post-pandemic labour shortages, and inflation, policymakers struggle to reconcile the need for immigration with growing tensions and anti-immigrant sentiment. And, even more puzzling, in some cases they do not even try, and instead pursue an opposite strategy by implementing ever stricter migration policies.

Why it matters

The global economy runs on talent. Nowhere is this clearer than in fast-moving industries like artificial intelligence, where skilled labour and intellectual capital are the primary engines of progress. Nations with the capacity to attract and retain top minds will shape the technological frontier — and, by extension, economic power — in the decades to come.

International students form a vital part of this ecosystem. Far from being mere consumers of education, they represent both an economic asset and a future workforce. They pay hefty tuition fees, contribute billions to local economies, and often remain after graduation to fill critical roles in sectors from engineering to healthcare. For example, Chinese students have long been a backbone of Western university enrolments, particularly in the United States, Australia, and the UK. Yet this flow is shifting. China’s own universities have rapidly closed the quality gap, offering students a compelling alternative at home, and an increasing number of Chinese students are making use of this option. Additionally, concerns about post-graduate job prospects in foreign markets have persuaded more Chinese and other foreign students to stay put.

“Immigration is not a silver bullet, but it is a potentially powerful tool to rejuvenate labour markets and sustain growth.”

Demographics only sharpen the stakes. Western societies are ageing fast. As birth rates fall and populations grey, many economies face shrinking workforces and rising fiscal pressures. Immigration is not a silver bullet, but it is a potentially powerful tool to rejuvenate labour markets and sustain growth. High-skilled migrants and graduates of local universities can help fill skill shortages, drive innovation, and contribute to the tax base, easing the demographic crunch; while low-skilled immigrants can sustain the current level of labour required in these jobs without increasing wages and the cost of services.

What keeps immigrants away

At the present time, just as the need for migrants grows clearer, the obstacles facing them are multiplying. Trade wars and tariffs, especially between major economies like the US and China, ripple through global labour markets. Higher costs of goods and inflation erode real incomes, making destination countries less attractive. Uncertainty over trade policy can freeze investment, stall hiring, and create a less welcoming environment for foreign workers and students alike.

At the same time, the rise of right-wing populism across Western democracies stokes anti-immigrant sentiment. Politicians exploit economic anxieties, blaming outsiders for social strains and job competition. This rhetoric — seen in the success of the AfD in Germany, Marine Le Pen in France, and Geert Wilders in the Netherlands — casts a long shadow over immigration policy. Even in countries that depend on migrant labour, political hostility can create a climate of fear and uncertainty.

Administrative barriers only add to the deterrent. Complex visa systems, long processing times, and strict work-permit regimes discourage both students and skilled workers from choosing certain destinations.

“policymakers struggle to reconcile the need for immigration with growing tensions and anti-immigrant sentiment.”

Post-study work rights, crucial to international students’ decisions, are increasingly under threat in some countries. In the UK, for instance, recent moves to limit the ability of students to bring dependents have raised alarm bells among universities and employers alike. Finally, policy inconsistency breeds hesitation. Potential migrants are quick to spot signs of unpredictability. When visa rules change suddenly, or when work opportunities seem vulnerable to political whims, they may decide it’s safer to build their futures elsewhere.

Challenges ahead

These pressures have created a paradox. Western economies face deepening labour shortages, fuelled by demographic decline and post pandemic market disruptions. Yet the very forces that make migration more urgent are also amplifying public fears and political resistance. Right-wing parties across Europe and North America have been quick to exploit these tensions. They frame migrants as economic threats, blaming them for unemployment and falling wages — even when the data shows otherwise. This scapegoating resonates during periods of inflation and insecurity, especially as trade wars and energy crises pinch household budgets.

“in countries that depend on migrant labour, political hostility can create a climate of fear and uncertainty.”

Ironically, immigration could be part of the solution. By easing labour shortages, particularly in critical sectors like healthcare, construction, and technology, migrants can help stabilise wages and contain inflation. They can support innovation and productivity, buffering economies against external shocks. But to unlock these benefits, policymakers must overcome public skepticism and build immigration systems that are fast, fair, and forward-looking.

The stakes are high. If Western nations fail to attract the talent they need, they risk ceding ground to more nimble competitors. Countries like Canada and Australia, which have embraced skilled migration as a pillar of growth strategy, are already reaping the rewards. Meanwhile, nations that close their doors — or create environments of hostility and uncertainty — may find themselves slipping in global influence and economic vitality.

The road ahead is not simple. Migration debates will remain politically charged, especially in times of economic turmoil. In the race for talent, however, moving backwards is not a winning strategy. Western societies must decide whether to view immigration as a problem to be contained, or as a vital asset for navigating an uncertain world.

• This article first appeared in Advantage Magazine Summer 2025