The need for immigrants – Pál Demény about the shrinking Hungarian population

Hungary Today recently published an interesting interview with Pál Demény, a demographer who is researching population trends. The 85-year-old Demény left Hungary in 1956, lived in the US and now has decided to retire to Budapest. (Read here.)

He was born in Nyíregyháza, went to university in Budapest and in 1961 received a PhD in Economics from Princeton. Demény has analyzed the links between demography, economics and policies and claims that Hungary will face a dramatic population decline soon. He agrees that by 2100 Hungary’s population will be halved; it will drop to 5.4 million. According UN estimates Hungary’s population will drop to 8.3 million by 2050. Can this trend be stopped, or only slowed down?

In order to increase its population Hungary’s fertility rate must reach or surpass 2.1. Currently it is at 1.49 which is a bit higher than neighboring countries. (Serbia 1.43, Slovakia 1.40, Croatia 1.39, Slovenia 1.35 and Romania 1.34)

To understand Hungary’s demographic drama we have to take a look at the numbers. In 1980 Hungary had close to 11 million people and today, 38 years later, the number is about 9.8 million. So in the last 40 years Hungary’s population declined about 1 million people. Today from the 9.8 million about 600,000 live temporarily (or permanently) in other, mainly EU countries while maintaining residences in Hungary. The country may have about 9 million people living within the borders.

In addition, according to surveys, about 1.2 million young people are ready to leave. With the exodus of the young adult population the decline will accelerate in years to come; labor shortages are already evident. Retail stores have shorter hours and it is almost impossible to find qualified painters, roofers and other trades people. Companies delay investments because they cannot find qualified workers.

Mr. Orbán thinks that by spending 4.6 percent of the GDP on family support programs sooner or later fertility rates will dramatically increase. I think he is mistaken and Demény also disagrees with him. He says that Hungary’s population decrease is irreversible!

Many demographers have warned that the Hungarian government is already late to start an immigration program. Demény thinks that the population problems of poorer countries will not be solved by emigration, “because only a small fraction of the population might conceivably leave.” He is probably right, but the “small fraction” can run in the millions.

I have a feeling that soon we’ll see a policy reversal in Hungary to encourage immigration, probably from Asia. The current anti-immigrant policy is unsustainable, it is not only damaging the economy but (ironically) encourages more Hungarians to leave the country and settle abroad.

The Economist’s headline says it all: “Eastern Europe’s workers are emigrating, but its pensioners are staying.” Young people who stay will be poor pensioners with ailing healthcare and low life expectancy. And the young people are also frustrated with the political situation in Hungary, the unreliable judicial system and the institutionalized corruption; they are tired of waiting for change. Their best bet is to leave the country while they can.

They can always come back later and have a comfortable retirement… just like Mr. Demény did.

György Lázár

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