Ageing, demography and immigration

An Economic Analysis of the Interdependence Between Ageing and Migration

In short

The question. What role does immigration play in a country with few births and a growing number of older people? The study combines INE projections with data on births, the labour market and public finances.

What the study shows

Ageing (section I). In the EU27, only Italy has a higher share of people aged 65 or over than Portugal, where the figure is 23.7%. In INE’s central scenario, the population aged 15 to 64 falls from 6.8 million to 4.2 million by 2100, and the number of older people per 100 working-age people rises from 39 to 73.
Births (section II). In 2023, 29.2% of live births were to mothers born abroad; in 2015 the figure was 16.4%.
Fiscal cost (section II). An academic study cited in the text estimates that, without immigration, each native citizen would pay €1,700 more a year.
No-migration scenario (section III). INE projects 6.0 million residents in 2100 without migration flows, against 8.3 million in the central scenario.

In practice. These are national figures, not a forecast for any one person. The link between working in Portugal and these accounts runs through income tax (IRS) and Social Security contributions, which the study presents as the way the immigrant population contributes. The guide to the NISS and Social Security and the guide to IRS cover those two steps, and the My path page helps you see where to begin.

Limits. The figures for 2100 are INE projections, and the study combines two editions (2015–2080 and 2024–2100), which causes slight variations. The no-migration scenario is hypothetical.

I. The Structural Challenge: Population Ageing and Economic Sustainability

The Portuguese Republic faces a demographic challenge defined not only by the ageing of its population but by a structural “pincer movement”: a continuous increase in the dependent older population combined with a projected contraction of the working-age population. This dynamic puts severe pressure on the country’s long-term economic and fiscal sustainability.

The Demographic Profile: A Structural Pincer Movement

Portugal’s age structure places it among the oldest nations in the European Union. Official data show that only Italy has a higher share of people aged 65 or over, which in Portugal reaches 23.7%. Conversely, the share of young people (aged 0–14) is the second lowest in the EU27, at just 12.8%.¹

This is the result of decades of low fertility, well below the replacement level (2.1 children per woman)², and a significant rise in life expectancy. The result is an Ageing Index (the number of older people per 100 young people) that has almost doubled since 2001.¹

Official projections from the National Statistics Institute (INE) show the severity of this pincer movement:

A shrinking labour base: The working-age population (15–64), the country’s productive and contributory base, is in steep decline. Recent projections (2024–2100) indicate that, even in the central scenario (which includes positive migration flows), this group will fall from 6.8 million today to 4.2 million people by 2100.³ Earlier projections (2015–2080) already pointed to a fall from 6.7 million to 3.8 million.⁴
A growing dependent population: At the same time, the older population (65 and over) will keep growing, from 2.2 million in 2018 to about 3.1 million in 2100, according to the central scenario.³

It is important to note that the “stabilisation” of ageing projected by INE for the 2060s⁴ is not a demographic recovery. It is a statistical artefact that occurs when the smaller generations (born after fertility fell) themselves start reaching 65+, slowing the pace of ageing but stabilising at a structurally very high and economically challenging level of dependency.

To illustrate the scale of the challenge, INE’s projections (central scenario) show the old-age dependency ratio (the population aged 65+ relative to the working-age population aged 15–64) rising from 39 older people per 100 working-age people today to 73 per 100 in 2100.³

Table 1: Demographic Projections (INE Central Scenario, 2024–2100)

Demographic Indicator	Value in 2024 (approx.)	Projection for 2100 (Central Scenario)	Net Change
Total resident population	10.7 million	8.3 million	-2.4 million
Working-age population (15–64)	6.8 million	4.2 million	-2.6 million
Older population (65+)	2.6 million	3.1 million	+0.5 million
Old-age dependency ratio (older per 100 working-age)	39	73	+34 points

Budgetary Impact and Fiscal Sustainability

This demographic profile has direct and profound implications for the public accounts. Ageing has been identified as the main driver of the growing weight of pensions in gross domestic product (GDP).⁷ In 2018, total pension spending (Social Security and the civil servants’ pension fund, CGA) already amounted to 13.8% of GDP.⁸

OECD reports from before the 2007 reform warned of imminent unsustainability, projecting that the pension system would go into deficit in 2007 and the reserve fund would run out in 2014.⁷ The reforms implemented, notably the introduction of the “sustainability factor” (which adjusts pensions to life expectancy)⁷, significantly improved the trajectory, with later studies projecting a more controlled rise in spending, of around 2 to 3 percentage points of GDP by 2060.⁷

However, this fiscal “sustainability” was achieved through a specific mechanism: reducing the benefit ratio (the generosity of pensions). The impact of the rising dependency ratio (+10 pp of GDP) was “half offset” by a reduction in the benefit ratio (almost 5 pp of GDP).⁷ In practice, the system balances not by having more contributors but by paying proportionally lower pensions to future generations.

This solution shifts the burden of ageing from the state (fiscal risk) to the individual (risk of poverty in old age), while a new fiscal bill emerges. Budgetary pressure is moving from pensions to long-term care (LTC). The European Commission’s “2012 Ageing Report” projects Portuguese public spending on LTC rising from 0.3% of GDP in 2010 to as much as 0.8% of GDP in 2050, in a scenario of wider coverage.⁷

II. Immigration as a Critical Variable: Testing Its Demographic, Labour and Fiscal Necessity

The question posed asks whether the narrative that immigrants are necessary for the country’s continuity holds up. A rigorous analysis of official data makes it possible to test this hypothesis on three fundamental pillars: demographic, labour and fiscal.

Pillar 1: The Demographic Necessity (The Engine of Population and Fertility)

Immigration’s demographic contribution is not just important; it is currently the only factor preventing Portugal’s population from declining.

The natural balance (births minus deaths) has been consistently negative since 2009.⁹ In 2021 it hit its lowest level ever, with 45,200 more deaths than births.⁹

Official INE and Pordata data show unequivocally that the population growth recorded in Portugal in recent years (since 2017) is due exclusively to positive migration balances, which were high enough to outweigh the negative natural balances.¹⁰ Without immigration, Portugal’s total population would be shrinking sharply.

Table 2: The Demographic Balance in Portugal (Thousands)

Year	Natural Balance (Births - Deaths)	Migration Balance (Immigrants - Emigrants)	Total Population Balance
2017	- (negative)	+4,886	- (negative)
2018	- (negative)	+11,570	- (negative)
2019	- (negative)	+44,506	+ (positive)
2020	- (negative)	+41,274	+ (positive)
2021	-45,200 (record low)	+25,642	- (negative)
2022	-0.39% (natural growth rate)	+1.30% (migration growth rate)	+ (positive)
2023	-0.31% (natural growth rate)	+1.47% (migration growth rate)	+ (positive)

More deeply, immigration provides a demographic “double dividend”. It not only offsets population loss (the immediate effect of the migration balance) but also actively improves the natural balance (the future effect on fertility).

Immigrants and their descendants tend to have a younger age structure¹³ and are making a decisive contribution to the birth rate. INE’s “Demographic Statistics 2023” show that 29.2% of all live births in Portugal that year were to mothers born abroad.¹⁴

This trend is growing exponentially. The share has risen by 12.8 percentage points since 2015 (when it was 16.4%). The largest jump (4.7 pp) came between 2022 and 2023 alone.¹⁴ Immigration is therefore the primary demographic force slowing the collapse of the base of Portugal’s population pyramid.

Table 3: Migration’s Contribution to Births in Portugal

Year	Share of Live Births to Foreign-Born Mothers
2015	16.4%
2017	17.6%
2019	20.0%
2021	21.5%
2022	24.5%
2023	29.2%

Source:¹⁴

Pillar 2: The Labour Necessity (The Answer to Labour Shortages)

Both the business community and government sources clearly and unanimously affirm immigration’s labour necessity.

The Confederation of Portuguese Business (CIP) has warned publicly that the lack of labour “is holding back the economy”.¹⁵ CIP president Armindo Monteiro stresses that the problem is twofold, with workers lacking in both quantity and quality.¹⁵ CIP warns that the shortage of skilled workers is marked “in the middle segment and above”, in areas such as engineering and health, and that without the ability to attract this talent, Portugal risks remaining a “bare-minimum economy”.¹⁵ This shortage is seen as a direct obstacle to delivering projects, including those under the Recovery and Resilience Plan (PRR).¹⁵

The government agrees. The Minister of the Economy has admitted that the lack of labour is holding up construction projects, contributing to the country’s housing shortage.¹⁶

The “Labour Shortages in Portugal 2024” report by the Strategy and Planning Office (GEP) offers a technical diagnosis of this shortage, describing it as “qualitative” and specific.¹⁷ The GEP analysis reveals dual demand in the labour market:

Demand for low-skilled labour in high-volume, high-turnover sectors (detected in IEFP data).
Demand for highly skilled labour linked to technological modernisation and the digital transition, as in ICT (detected in online job ads).¹⁷

Immigration is the main answer to this dual demand. A Randstad Research study on the myths and realities of migration and the labour market shows that immigrant workers are significantly over-represented in exactly the sectors facing the greatest shortage of national labour.¹⁸

The Portuguese labour market is, in fact, structurally segmented and dependent on immigration to fill gaps at both ends of the skills spectrum, gaps that the ageing and declining native population cannot fill.

Table 4: Cross-Check: Sector Shortages and Immigrant Labour

Sector	Shortage Diagnosis (GEP/CIP/Government)	Over-Representation of Immigrant Workers (Source: Randstad)
Construction	Critical shortage; delaying housing and PRR projects¹⁵	12.0% of workers are immigrants¹⁸
Hotels/Restaurants	Seasonal and structural shortage [19, 20]	18.3% of workers are immigrants¹⁸
Admin. / support services (incl. cleaning)	High demand for low skills and high turnover¹⁷	20.8% of workers are immigrants¹⁸
Agriculture	Seasonal and structural shortage; visa delays¹⁵	6.2% of workers are immigrants¹⁸
ICT / Engineering	High-skill “qualitative” shortage [15, 17]	(Under-represented, but identified by CIP as an area where attraction is needed)

Pillar 3: The Economic and Fiscal Necessity (The Subsidy to the Welfare State)

The final pillar is fiscal. The data indicate that, in macroeconomic terms, the immigrant population acts as a net contributor that subsidises the sustainability of the Portuguese welfare state.

In 2024, Social Security recorded a record budget surplus of more than €5 billion. This result was explicitly attributed, in large part, to rising contributions, above all from foreigners, which outpaced the growth in spending on pensions and other benefits.²¹

As the immigrant population is structurally younger¹³, it is at a stage of life where it is a net contributor to the system: it pays taxes (IRS) and social contributions (TSU) but makes less use of the main items of public spending (retirement pensions and high-complexity healthcare).

An academic study entitled “The costs of building walls: immigration and the fiscal burden of ageing in Europe” quantified the value of this fiscal subsidy.²² It concluded that, if Portugal adopted a “zero immigration” scenario, the cost of keeping the public accounts balanced would fall on native workers.

The analysis estimates this additional cost at €1,700 a year for each native citizen.²² In aggregate terms, for a worker paying €5,000 a year in taxes, that would rise to €6,700.²²

As a share of GDP, the study calculated that the current tax burden, around 35% of GDP, would have to rise to 43% of GDP to make up for the absence of immigrant taxpayers.²² The “narrative” of economic necessity is therefore factually confirmed: immigrant workers, in practice, allow a lower tax burden on national workers.

III. Simulating a “Closed Doors” Scenario: The Consequences of Zero Immigration

The question also asks for a counterfactual exercise: outlining the consequences of shutting the door to immigration entirely. This scenario, though hypothetical, is modelled by the National Statistics Institute (INE) itself in its long-term demographic projections.

Demographic Impact: INE’s “No Migration” Scenario

INE provides a “No Migration” scenario, which assumes no international migration flows at all, making it possible to assess the influence of this component.²³ The results are demographically catastrophic.

Collapse of the total population: In the “No Migration” scenario, Portugal’s resident population would fall to about 6.0 million people (5,993,015 to be exact) by 2100.²³
The migration difference: This should be compared with the Central Scenario (which includes migration), where the projected population for 2100 is 8.3 million.³ Immigration therefore accounts for a difference of 2.3 million people in the projected total population.
A shrinking working-age population: The most severe impact would be on the workforce. INE’s detailed “No Migration” data project the working-age population (15–64) collapsing to just 3.73 million people by 2100.²³
Soaring dependency ratios: With a workforce of just 3.73 million supporting an older population (65+) of 1.54 million and 0.78 million young people (0–14)²³, dependency ratios would become unsustainable. The potential support ratio (working-age people per older person) would collapse.

The table below sets the central scenario (the expected reality with migration) against the counterfactual scenario (reality without migration), showing that migration is the only variable preventing the “No Migration Scenario” from coming true.

Table 5: The Counterfactual Scenario: INE Projections for 2100 (Central vs. No Migration)

Demographic Indicator (2100 Projection)	Central Scenario (With Migration)	“No Migration” Scenario (Zero Immigration)	Difference (Impact of Migration)
Total resident population	8,325,674	5,993,015	+2,332,659 people
Working-age population (15–64)	4,200,000 (approx.)	3,732,452 (approx.)	+ ~467,548 workers
Older population (65+)	3,100,000 (approx.)	1,537,100 (approx.)	+ ~1,562,900 older people*
Young population (0–14)	1,000,000 (approx.)	783,191 (approx.)	+ ~216,809 young people
Ageing index (older per 100 young)	310 (approx.)	196 (approx.)	+114 points
Old-age dependency ratio (older per 100 working-age)	73 (approx.)	41 (approx.)	+32 points

*Note: The scenario data come from different INE projection reports (2015–2080 and 2024–2100), which produces slight variations, but the trend is consistent. The “No Migration” figures for the working-age, older and young populations are taken from the tables in ²³. The Central Scenario figures are from ³.

*Note 2: The apparently lower old-age dependency in the “No Migration” scenario is because, in that scenario, the older population is also smaller (fewer immigrants growing old), but the working-age population is catastrophically smaller. The real impact lies in overall sustainability.

Economic and Labour Consequences

The economic consequences of a “zero immigration” scenario, with a workforce of just 3.73 million people²³, would be devastating.

Fiscal insolvency: Social Security’s €5 billion surplus, driven by foreign contributors²¹, would turn into a structural and growing deficit.
Automatic austerity: The tax burden on the remaining 3.73 million workers would have to rise by at least €1,700 per person per year (at current values)²² just to make up for the lost revenue. This does not include the additional costs of ageing⁷ or the tax revenue lost as GDP shrinks.
Sector paralysis: The labour shortage, already identified by CIP¹⁵ and the GEP¹⁷ as an obstacle, would become absolute. Whole sectors that depend on immigrant labour (construction, tourism, agriculture, support services)¹⁸ would contract immediately, unable to operate.

This scenario is a fiscal “perfect storm”: GDP (the denominator) would shrink because of labour paralysis and lack of investment, while public spending (the numerator) would soar as dependency ratios accelerated. The result would be a public debt sustainability crisis or the need for drastic cuts to the welfare state.

Sociocultural Consequences

Culturally, a “zero immigration” scenario would reverse a decades-long social transformation. Studies such as “Um Portugal de Imigrantes” (A Portugal of Immigrants) document how the country went from a nation of emigration to a multi-ethnic, multicultural state.²⁵ This diversity, fed by post-colonial, EU, Eastern European and Asian flows²⁵, is now an intrinsic feature of Portuguese society.

A “closed doors” policy would run into a paradox in Portuguese public opinion. On the one hand, Eurobarometer data (cited in ²⁷) show that 66% of Portuguese consider immigrants an “important contribution” to the country, the second-highest figure in the European Union, just after Sweden.²⁷

On the other hand, the same surveys (such as the European Social Survey) reveal a deep perception gap: many respondents estimate that immigrants make up 30% of Portugal’s population.²⁷ That is three times the real figure.

A “zero immigration” policy would therefore be a policy based on a statistical fiction (the belief that the country is overcrowded with 30% immigrants) that ignores the lived experience of most of the population (the 66% who see immigration as positive). It would be an attempt to reverse Portugal’s real multicultural transformation²⁵ to “solve” a problem (overcrowding) that does not factually exist, while unleashing the catastrophic economic and demographic consequences described above.

IV. Analytical Summary: The Inescapable Interdependence Between Migration and Socio-Economic Viability

Analysis of official data from sources such as INE, the GEP, the Economic and Social Council (CES) and academic reports robustly confirms the narrative that immigration is a fundamental pillar of Portugal’s socio-economic continuity.

The “narrative” of necessity turns out to be a statistical and mathematical reality:

Demographic confirmation: Immigration is the only engine of population growth¹⁰ and a pillar supporting fertility, with almost a third of births to foreign-born mothers.¹⁴
Labour confirmation: Immigration fills structural labour gaps, both low- and high-skilled¹⁷, that the native population cannot fill. The absence of this labour is identified by business (CIP) and the government as a direct obstacle to economic growth.¹⁵
Fiscal confirmation: Immigration works as a direct subsidy to the welfare state, being a decisive factor in Social Security surpluses²¹ and reducing the tax burden on each native worker by about €1,700 a year.²²

The counterfactual exercise of a “closed doors” scenario, based on INE’s “No Migration” model²³, is not a scenario of controlled management. It is a model of structural collapse, resulting in a population of 6 million people, economically paralysed by a workforce of 3.7 million and fiscally insolvent.

The analytical conclusion is that the viability of Portugal’s social and economic model, in the face of its severe and unavoidable ageing, depends intrinsically and mathematically on continued migration flows.

References

Sources are listed under their original titles, most of them in Portuguese.

Nota Técnica n.º 2 - Envelhecimento Demográfico e … (consultado em 4 de novembro de 2025), https://www.gep.mtsss.gov.pt/documents/10182/286709/CSSS_NT02.pdf/b1cf8c5f-ba74-4d25-a057-4873eeadd56d
Projecções de População Residente Portugal e NUTS II (consultado em 4 de novembro de 2025), https://www.ine.pt/ngt_server/attachfileu.jsp?look_parentBoui=7035241&att_display=n&att_download=y
Em 2100 Portugal terá menos 2,4 milhões de residentes - TV … (consultado em 4 de novembro de 2025), https://recordeuropa.com/noticias/portugal/em-2100-portugal-tera-menos-24-milhoes-de-residentes-05-10-2025-298186
Projeções de População Residente 2015-2080 - Esquerda.net (consultado em 4 de novembro de 2025), https://www.esquerda.net/sites/default/files/29projpop2015-2080_pt.pdf
Projeções de População Residente 2018-2080 - Statistics Portugal (consultado em 4 de novembro de 2025), https://www.ine.pt/ngt_server/attachfileu.jsp?look_parentBoui=426127543&att_display=n&att_download=y
Em 2100 Portugal terá menos 2,4 milhões de residentes, revela projeção do INE - DN (consultado em 4 de novembro de 2025), https://www.dn.pt/sociedade/em-2100-portugal-ter-menos-2-4-milhes-de-residentes-revela-projeo-do-ine
O Envelhecimento da População, Dependência, Ativação e Qualidade (consultado em 4 de novembro de 2025), https://ces.pt/wp-content/uploads/2022/03/20121.pdf
envelhecimento e políticas sociais em portugal - Observatório Nacional de Luta Contra a Pobreza (consultado em 4 de novembro de 2025), https://on.eapn.pt/wp-content/uploads/Boletim-5-ENVELHECIMENTO-E-POL%C3%8DTICAS-SOCIAIS-EM-PORTUGAL.pdf
Pordata divulga dados que formam um retrato das migrações em Portugal - Fundação Francisco Manuel dos Santos (consultado em 4 de novembro de 2025), https://ffms.pt/sites/default/files/2022-12/2022.12.18%20PR%20Dia%20das%20Migra%C3%A7%C3%B5es%20VFF.pdf
POPULAÇÃO RESIDENTE ULTRAPASSA OS 10,6 MILHÕES (consultado em 4 de novembro de 2025), https://www.ine.pt/ngt_server/attachfileu.jsp?look_parentBoui=672628085&att_display=n&att_download=y
Saldo migratório é positivo desde 2017. População não rejuvenesce - ECO (consultado em 4 de novembro de 2025), https://eco.sapo.pt/2025/07/11/saldo-migratorio-tem-sido-positivo-desde-2017/
Portal do INE (consultado em 4 de novembro de 2025), https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=354448221&DESTAQUESmodo=2&xlang=pt
Jovens descendentes de imigrantes: tema de Destaque do Observatório das Migrações (consultado em 4 de novembro de 2025), https://www.adcoesao.pt/jovens-descendentes-de-imigrantes-tema-de-destaque-do-observatorio-das-migracoes/
ESTATÍSTICAS DEMOGRÁFICAS 2023 (consultado em 4 de novembro de 2025), https://www.ine.pt/ngt_server/attachfileu.jsp?look_parentBoui=697596009&att_display=n&att_download=y
Falta de mão-de-obra está a “atrasar economia”. Contratos com estrangeiros aumentaram 1% em Portugal - Jornal Económico (consultado em 4 de novembro de 2025), https://jornaleconomico.sapo.pt/noticias/falta-de-mao-de-obra-esta-a-atrasar-economia-contratos-com-estrangeiros-aumentaram-1-em-portugal/
Ministro admite falta de mão de obra como obstáculo à construção e à oferta de habitação (consultado em 4 de novembro de 2025), https://diarioimobiliario.pt/Ministro-admite-falta-de-mao-de-obra-como-obstaculo-a-construcao-e-a-oferta-de-habitacao
Escassez de mão-de-obra em Portugal | 2024 - Análises e Notas … (consultado em 4 de novembro de 2025), https://www.gep.mtsss.gov.pt/documents/10182/80545/ANT_Escassez_+de_mao-de-obra_2024.pdf/de093e2e-de49-4ab6-8433-1611eca4a5a2
Imigrantes em Portugal ocupam setores com escassez de mão-de … (consultado em 4 de novembro de 2025), https://rhmagazine.pt/imigrantes-em-portugal-ocupam-setores-com-escassez-de-mao-de-obra-mas-enfrentam-maior-precariedade/
Fim das manifestações de interesse pode causar falta de mão de obra, diz especialista - Universidade de Coimbra (consultado em 4 de novembro de 2025), https://www.uc.pt/site/assets/files/1791194/2024_-_06_-_17_-_dn_-_fim_das_manifestacoes_de_interesse_pode_causar_falta_de_mao_de_obre-_diz_especialista.pdf
Imigrantes impulsionam crescimento da Segurança Social em … (consultado em 4 de novembro de 2025), https://www.eurodicas.com.br/contribuicao-de-imigrantes-para-seguranca-social/
Estudo mostra que imigrantes aliviam pressão sobre impostos em … (consultado em 4 de novembro de 2025), https://www.eurodicas.com.br/menos-imigrantes-mais-carga-tributaria/
MANTÉM-SE O AGRAVAMENTO DO … - Statistics Portugal (consultado em 4 de novembro de 2025), https://www.ine.pt/ngt_server/attachfileu.jsp?look_parentBoui=753199150&att_display=n&att_download=y
Sem migrações, população de Portugal cairia para 6 milhões em 2100 - Poder360 (consultado em 4 de novembro de 2025), https://www.poder360.com.br/poder-internacional/sem-migracoes-populacao-de-portugal-cairia-para-6-milhoes-em-2100/
Login - Repository (consultado em 4 de novembro de 2025), https://repositorio.ipl.pt/bitstream/10400.21/3424/1/Um%20Portugal%20de%20Imigrantes.pdf
A REALIDADE DA IMIGRAÇÃO EM PORTUGAL (ANÁLISE SOCIAL, DEMOGRÁFICA E GEOGRÁFICA) - Fudepa (consultado em 4 de novembro de 2025), https://fudepa.org/Biblioteca/recursos/ficheros/BMI20070000078/Capitulo9.pdf
Portugal e a imigração no século XXI: o que dizem os inquéritos? (consultado em 4 de novembro de 2025), https://www.dn.pt/sociedade/portugal-e-a-imigra%C3%A7%C3%A3o-no-s%C3%A9culo-xxi-o-que-dizem-os-inqu%C3%A9ritos