The impending exit of Britain from the European Union (Brexit) following the referendum on 23 June 2016 continues to bring up questions about the future demographics of the country and their socioeconomic implications. The rich multiethnic, multicultural structure of the UK society has been historically shaped by several waves of economically motivated migration, the last of which began after the accession of Eastern European countries to the EU in 2004. Similarly, Brexit will influence its future composition through population shifts in migration patterns between Britain and the rest of EU. The country will undergo a significant demographic transformation, which can be expected to have a strong impact on the society and politics. Its exact nature will largely depend on the UK's stance on immigration after Brexit planned for the end of March 2019.
We use microsimulation to forecast and compare the impact of different policy scenarios on the UK demographics, depending on the referendum outcome and subsequent relationships with EU and non-EU countries:
We analyse the implications of the scenarios for the future age, sex and ethnic structure of the UK population, and estimate its basic socioeconomic indicators.
The differences between Brexit and Remain cases, although significant, are mostly those of degree. In the constantly growing population, the median age and dependency ratios will continue to rise, and the percentage of women of reproductive age will fall regardless of the EU membership status. These changes result mostly from the interplay between extending lifespans and lower average fertility rates. The influx of immigrants from current and prospective EU countries, as well as their children, could partially forestall them. This young group with the prevalence of women cannot be replaced with the boost of non-EU immigrants. At the same time, the share of native British in the UK population will shrink, even after their repatriation and the exodus of EU immigrants after the Brexit, owing to high fertility rates of other ethnic groups.
The above demographic changes will have important fiscal consequences both on the revenue (lower number of people of working age) and expenditure (higher medical care costs and a fraction of pensioners offset by lesser demand on school and maternity services) side. Under all considered scenarios, the UK demographics will undergo a significant transformation, which can be expected to have a strong impact on the society and politics. Its exact nature will depend on the UK's stance on immigration after Brexit. However, the presented results indicate that alleviating the growing strain placed by the ageing population on the country's social services will require additional interventions.
The article “Microsimulations of demographic changes in England and Wales under different EU referendum scenarios” describes the details of our modelling approach.