Refugees are pouring into the European Union (EU) at a scale not seen since the Second World War. In 2015 alone, 893.695 applied for asylum, up from around 250.000 in 2010, according to Eurostat. The magnitude of these influxes has rocked the EU boat, prompting yet another consequential crisis on top of last year’s Greek bailout and the incoming referendum on the UK’s permanence.
But beyond the political crisis lies economic opportunity. The EU is home to some of the world’s oldest populations, which already puts strain to pension systems across the continent. In Germany, the labor force will shrink sharply in the coming decades, while Greece already faces cuts in its social security spending in order to maintain the overall sustainability of the pension system.
The arrival of young refugees can alleviate some of the EU’s demographic troubles. For one, the newcomers were considerably younger than the locals in 2014, as our Econographics shows, which was also true for 2015. Their median age was about half of Germany’s, which sits around 46 years old. Finally, if refugees are absorbed successfully, they could add up to 1m people to the EU labor force by the end of 2016 and have positive impacts in the EU’s GDP and public finances, according to recent research by the IMF and the OECD.