Italy Economy Real Time Data Charts

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Italy related comment. He also maintains a collection of constantly updated Italy economy charts together with short text updates on a Storify dedicated page Italy - Lost in Stagnation?


Tuesday, December 12, 2006

Immigrants and Italian GDP Growth

Looking for something else I just stumbled across this:


Italy’s 3.6 foreign residents are an added asset to the country’s economy and their labours account for 6.1% of its GDP, some 86.7 billion euros in 2005, according to a new report.

Published Monday in the authoritative financial daily Il Sole 24 Ore, the report pointed out how Italy’s immigrants were responsible for “keeping the nation from suffering two heavy recessions in recent years”.

Without their contribution, Il Sole explained, “Italy’s GDP would have fallen by 0.1% in 2002, 0.6% in 2003 and 0.9% in 2005.

Almost 2.1 million immigrants hold regular jobs and they totally dominate the domestic services sector, accounting for 80% of the sector’s contribution to the country’s GDP to the tune of 9.6 billion euros.

Immigrants play an even bigger role in the services sector contributing 37 billion euros to the nation’s wealth, equal to 4.3% of the sector’s GDP.

According to the report, the contribution immigrants make to the economy has been growing constantly.

From 1993 to 2000, GDP rose 15.4% in real terms, but this would have been 13.5% without immigrants, Il Sole calculated.

In the following five years, GDP rose by 3.2% “of which 3.1% was thanks to the work of immigrants. This is equal to 96% of the increase,” the study concluded.


The data presented here is fascinating. The picture is pretty similar in Spain, although since Spain's population ex-immigration isn't actually falling all we can say is that Spain's economy has risen substantially more than it would. Any Il Sole reader (Paris??) out there know what the actually study they are referring to was, and where it is to be found?

I suppose I don't need to ram this point home, but it does rather confirm my argument that those countries with ageing populations who cannot attract immigrants will actually see GDP shrink at some stage.

3 comments:

Vittorio said...

In my personal opinion, this study has some problems:

1. given that data on standard labor units (ULA) are not available for immigrants workers, they calculate it by applying to total ULA, the share of part-time immigrants workers to total workers.

2. they apply an individual productivity (VA/ULA) by industry to total ULA by industry. But ULAs are not a good indicator for productivity because they don't account for the effective hours worked.

3. they don't disaggregate the immigrant workers between their work position, so they don't account for the different productivity of a in-house colf and a blue collar in mechanics.

4. In Italy many immigrants workers are not accounted in the official statistics but the Value Added indicator accounts for the "immersed" quota.

Regards
Vittorio Viaggi

Anonymous said...

Sorry I've no idea where they got the data from. I don't think attracting immigrants is a problem in Italy. There are boatloads arriving every day!!

So if that's the problem: they've already found the answer.

Edward Hugh said...

Vittorio,

Thanks for this. Basically I am in sympathy with what you say. This can at best be a rough and ready study, which is why I would like to see the full piece. You don't have a link do you.

It would be nice to see a more precise study of all this since there is going to be a lot of debate about the issue of growth and immigration.

I touch on some of the issues also in my Itay's supply constraint post (in the worth the read section in the sidebar).

Also, if you have the time, I have just put a very long post up on the Demography Matters blog following an article today in the Financial Times from Marty Feldstein on Ageing Populations, Immigration and Growth.