Implementing dynamics of immigration integration in labor force participation projection in EU28

Many developed countries have turned to immigration in order to mitigate the consequences of population aging, particularly the expected decline in the labor force population. Yet, few projection models take in consideration explicitly the differentials in labor force participation of population sub-groups. This paper describes the labor force participation module of CEPAM-Mic, which is a microsimulation model that projects several demographic, ethnocultural and socioeconomic dimensions of the EU28 member countries population. Then, the microsimulation model is used to project EU labor force population for the period 2015-2060 under different scenarios illustrating how implementing sex- and country-specific dynamics of immigrants’ integration may affect the future labor force in terms of size, rates and gender composition. We estimated the parameters of the labor force module using logistic regressions based on the EU-Labour Force Survey (EU-LFS). In addition to age, sex and education, immigrant-related variables are also included, such as immigrant status, place of birth, age at immigration and duration of residence in the estimation of the probability of being active. Our results demonstrate the importance of taking into account differentials in labor force participation of population sub-groups when asserting the potential of immigration as a tool for managing population aging. In the European context, adding immigration differentials in labor force participation affects mainly downward the number of female immigrants in the labor force, while smaller differences are observed for male immigrants. An increase in immigration levels leads obviously to an increase in the total labor force size, but may also widen gender inequalities in labor force participation and has limited impact on the total labor force participation rate. Our findings suggest that relying on immigration as a tool to alleviate economic issues arising from population aging must imperatively be ac