Immigration and AI: Two Levers for Ageing Economies
Work News | New Stardom
Christine Lagarde, President of the European Central Bank, at a press conference earlier this year. Her remarks focused on the structural role of migration in sustaining Europe’s labour market.
Photo: Maria-Rita Quitadamo / European Central Bank
At the Federal Reserve’s annual symposium in Jackson Hole, Christine Lagarde did not mince words. Europe’s economy, she told central bankers, cannot grow without migrants. Foreign-born workers make up less than a tenth of the EU’s labour force, yet delivered half of its job growth since 2022. Without them, Lagarde warned, the bloc’s recovery would have been far weaker, and the outlook far bleaker, as populations age and the pool of domestic workers shrinks.
Her intervention captured a reality the OECD has been charting for years. By 2060, the ratio of retirees to working-age adults across advanced economies is projected to rise from one in three to one in two, pushing pensions and health systems to their limits. Labour shortages that once looked cyclical are increasingly structural.
For instance, in Greece, officials warn the country will need more than two million additional workers by 2035 to offset mass retirements and sustain growth, according to Ekathimerini. Earlier this year, the same outlet reported government plans to recruit 200,000 workers within five years through a migration-system overhaul. Other European economies are under similar pressure, combining migration reforms with policies to raise female and older worker participation.
Artificial intelligence does not move people across borders, but it is reshaping how labour supply interacts with demand. PwC’s 2025 Global AI Jobs Barometer, based on nearly a billion job ads, shows that employment in AI-exposed occupations is still rising, but at a slower pace than elsewhere, 38 percent over the past five years compared with 65 percent in jobs less exposed to AI. Rather than producing a jobs boom or collapse, the technology appears to be moderating growth and reshaping roles, raising productivity per worker even as labour pools tighten.
The IMF has described automation as a potential stabiliser for ageing societies: a way to sustain output when there are fewer people in the labour force. Evidence from Europe suggests this is already happening. Occupations most vulnerable to automation are seeing wages rise and skills shift toward more complex tasks, a pattern that contradicts fears of wholesale displacement.
For policymakers, the implication is not immigration or AI, but both. Migrant workers remain essential to filling immediate shortages in healthcare, construction, and logistics. Artificial intelligence, still in its early stages of adoption, offers a second lever by enabling smaller workforces to sustain growth. The difficulty lies in execution: managing migration without triggering social backlash, and deploying AI in ways that build trust rather than deepen inequality.
Lagarde’s warning was aimed at governments tempted to turn inward. Ageing economies, she said, cannot afford to close the door to migration. The same lesson applies to technology. Without new workers and new tools, the structural shortage of labour will only grow sharper and the promise of long-term prosperity more remote.
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