Chapter One: Migration Trends
Following the structure of the MAC's call for evidence, this chapter sets out the trends in EU migration to Scotland and the characteristics of EU citizens residing in Scotland, including their country of birth, age and skill level.
It demonstrates the vital importance of migration in supporting population growth and therefore economic growth across Scotland. As the evidence shows, migration is essential in ensuring that we have the available workforce that our economy needs, ensuring that businesses right across the country are able to recruit workers. Migration is also crucial in helping to support our ageing population and the needs of remote, rural and coastal communities.
It is therefore essential that the UK as a whole, and Scotland, are able to continue to benefit from the continued flow of working-age EU migrants that results from the free movement of persons. As the data below shows, the overwhelming majority of EU citizens moving to Scotland are of working age (between 16 and 64 years old). A larger proportion are under 35 years old, compared to the Scottish population as a whole and more than half were in the prime working age category (25-49 years old).
Historically, Scotland has been a country of net out-migration, with more people leaving to live elsewhere than moving to live in Scotland. However, since the 1960s net out-migration has greatly reduced, and from 1990 onwards that trend has reversed. Since 2001, Scotland has been in a period of net in-migration, driven by the growth in numbers of EU citizens coming to live and work in Scotland. In the year to mid-2016, 31,700 more people came to Scotland than left, helping to increase Scotland's population. This was made up a net gain of 22,900 people from overseas and 8,800 people from the rest of the UK.
Characteristics of EU citizens in Scotland
In 2016 there were approximately 209,000 EU citizens living in Scotland, around two thirds of all non- UK nationals residing in Scotland (a total of 337,000). EU citizens account for 3.9% of the total population living in Scotland and non- EU nationals account for a further 2.4%. The majority of EU citizens residing in Scotland are from the so-called ' EU8' countries who joined the EU in 2004 (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia), representing 59.3% of the total number of EU citizens living in Scotland. A further estimated 22,000 EU citizens report their nationality as Irish Republic (10.5% of the total number of EU citizens living in Scotland).
The vast majority of migrants moving to Scotland - 84% - are of working age. EU citizens in particular have a younger age profile than non- EU nationals and the Scottish population as a whole. A larger proportion (61.1%) of EU citizens residing in Scotland were under 35 years of age, compared with 54.3% of non- EU nationals and 41.5% for Scotland as a whole.
128,000 EU citizens aged 16 and over were in employment, making up 5.0% of total employment in Scotland. The employment rate for EU citizens was 76.8% - higher than the overall rate for Scotland. For those from EU8 countries the employment rate was even higher, at 82.4% compared with 70.7% for the older EU member states (the so-called ' EU14') and 73.3% for UK citizens. Around two-thirds of all EU citizens in employment in Scotland work in three industry sectors: distribution, hotels and restaurants (26.3%); public administration, education and health (20.6%); and banking, finance and insurance (19.5%).
In terms of education and skills, over a third (36.7%) of EU citizens of working age in Scotland have a degree level qualification or higher, compared to just over a quarter (27.6%) of UK nationals who have degree or higher qualifications.
Evidence suggestions that a large number of EU citizens working in Scotland are working in jobs below the level that their education and qualifications may suggest. Nearly a third (31.7%) of EU citizens in employment who had degree qualifications worked in medium-low or low skill level occupations. In contrast, only 18.8% of UK nationals with a degree qualification in employment were working in medium-low or low skill level occupations  .
Addressing Scotland's demographic needs
Scotland's estimated population was 5,404,700 in mid-2016, the highest ever on record, and an increase of 31,700 (0.6%) since mid-2015 and 6.7% since 2001. Net migration has contributed to population increase every year for the last 16 years. In contrast, the rate of natural change (births minus deaths) has remained low for the past 50 years, and over the past 2 years has been negative (more deaths than births). This contrasts with the situation in the UK, where natural change contributes significantly more to population increase (36% of the total increase over the latest year in the UK). Migration has, therefore, been critical to growing Scotland's population and any reduction in migration has the potential to seriously damage Scotland's demographic resilience.
Looking ahead, Scotland's population is projected to increase by 5% by 2041, driven solely by migration. Scotland has a markedly different demographic profile from the rest of the UK. Whereas in the UK as a whole, population growth is projected to be driven by both migration and natural change, in Scotland population growth is projected to be driven entirely by migration. If current trends continue, net inward migration is projected to be the sole contributor to Scotland's population growth; all of our population increase over the next 10 years is projected to come from migration (58% from net international migration and 42% from net migration from the rest of the UK), whereas in the UK as a whole the population is projected to increase due to gains from both net migration (54%) and natural change (46%).
Scotland's population is ageing, similar to the rest of the UK. The number of older people in Scotland is projected to increase significantly, with the population aged 75 and over projected to increase by 79% by 2041. Scotland's median age is currently almost two years higher than the UK. Scotland's median age is projected to rise from 41.9 years in 2016 to 45.4 years by 2041 compared with 40.0 years to 43.5 years for the UK as a whole. The ageing population has the dual effect with respect to public services of increasing pressures on health and social care, while reducing the available workforce in these sectors. Given these demographic challenges, inward migration can play an important role in helping tackle our ageing population, helping Scotland maintain a healthy working age population, support the growing number of older people and boost population growth.
Stimulating population growth is a key driver in Scotland's sustainable economic growth, increasing the size of the labour force, economic output and demand for goods and services, creating business and employment opportunities. This is particularly important for supporting the population and viability of businesses in our many rural and coastal communities, to ensure that local industries have access to a labour force that allows businesses to compete and grow.
Whilst Scotland's population is projected to grow by 5% between 2016 and 2041, any reduction in EU migration could have a serious effect on Scotland's population growth and its demographic composition. For example, in an illustrative scenario where EU migration to Scotland falls to half of current levels, population growth would be 4% over the same period and with no EU migration, population growth would be just 2%. The projected age structure could also change dramatically. The working age population is currently projected to increase by 1% over the next 25 years to 2041 but in a scenario of zero EU migration, the working age population is projected to decline by 3% over the same period. For children (aged under 16 years), the population is projected to decrease by 2% between 2016 and 2041 based on the principal projection but in a scenario of zero EU migration, the population of children is projected to decline by 7% over the same period. This is because migrants tend to be younger than the rest of the population and therefore can play an important role in boosting the population of children and working age people in Scotland. This can also have the effect of supporting the sustainability of rural services and schools.
Migration is therefore absolutely fundamental in ensuring Scotland's population growth. Stimulating population growth is a key driver in Scotland's sustainable economic growth, increasing the size of the labour force, economic output and demand for goods and services, creating business and employment opportunities. This is particularly important for supporting the population and viability of businesses in our many rural and coastal communities, to ensure that local industries have access to a labour force that allows businesses to compete and grow. It is impossible to overstate the critical role of migration in Scotland's future growth and prosperity.