Switzerland expands as Europe contracts and neither is happy  

Room for another beach towel? Switzerland’s population growth as symbolised at the Oberer Letten lido in Zurich. Keystone / Ennio Leanza

A Swissinfo analysis unpacks how demographic change and workforce migration are transforming Europe and Switzerland. There is no viable roadmap for the future, limited winners, and profound disruptions on the horizon.

In hospitals in the German-speaking region of Switzerland, rather than using local dialects, people speak standard German. Without foreign staff, the Swiss healthcare system would not work.

On average, more than 41% of doctors are trained abroad. At some hospitals, the proportion is much higher. At Zurich University Hospital, more than 50% come from abroad, many of them from Germany.

The idea of poaching doctors is only the most prominent example of what economists call the “import of human capital”. Many vacancies in Switzerland can only be filled thanks to migrant workers from the EU.

This happens across the labour market. “What characterises Switzerland is its ability to attract both highly qualified professionals and unskilled workers at the same time, in jobs that Swiss nationals tend to shun,” says Philippe Wanner, professor of demography at the University of Geneva.

Discontent in Switzerland

One consequence of this immigration is sustained population growth. Apart from a few small examples, no other country in Europe has seen net immigration on this scale since the turn of the millennium.

The effects are visible in transport, infrastructure, and housing, and are fuelling a debate in Switzerland about “density stress”. Traffic jams have increased, and both rents and property prices have risen sharply in recent years.

Policymakers have struggled to mitigate the impact of immigration, a shortcoming that demographer Wanner partly links to the slow pace of Switzerland’s federal system.

Growing discontent will come to a head in June, when the Swiss vote on the “no to ten million Switzerland” initiative. Launched by the Swiss People’s Party, the initiative calls for the population to be kept below ten million until 2050, even if this limits the free movement of persons agreement and strains bilateral relations with the EU.

Switzerland’s population currently stands at about 9.1 million. The Federal Statistical Office (FSO) expects this to reach 10.3 million by 2050. In fact, without immigration, low birth rates would lead to a population decline starting in 2035. The fertility rate has recently dropped to a record low of 1.29 children per woman.

Immigration more than compensates for this drop in births. Until the end of the century, the Swiss population is forecast to keep growing, according to United Nations projections.

The EU’s internal divides

The situation is different in the European Union. According to Eurostat, the EU’s statistical office, the population reached its peak in 2026 and will decline from that point onwards.

This trend is reinforced by the EU’s increasingly restrictive external border policies and falling birth rates. In 2024, the fertility rate stood at 1.34 children per woman – well below the replacement level of 2.1, at which one generation replaces the next.

Of course, demographic trends differ widely across countries. In 14 of the states analysed by Eurostat, populations are already shrinking, while 25 still record growth. As in Switzerland, population growth is mainly driven by internal migration within Europe.

Alongside small states such as Luxembourg and Malta, Ireland and the Netherlands are among the countries experiencing population growth. Like Switzerland, they use competitive tax policies to attract investment, which leads to growing pains.

Population decline is most pronounced in the Baltic states, the Western Balkans, and Eastern Europe. Greece and Italy are also seeing rapid population loss. In some areas, “demographic deserts” are forming. In southern Italy, for example, despite being part of the world’s eighth-largest economy, whole regions are becoming depopulated.

“Migration acts as a balancing mechanism in the labour market,” says Leo van Wissen, who heads the Premium EU project on migration and policy responses. One of his key findings is that migration does not align with national borders. The real shifts often happen within countries. Van Wissen argues that the EU should focus its compensatory measures in regions rather than states.

Regional patterns are also evident in Switzerland, albeit somewhat different ones. From abroad, every canton reports net migration.

Within the country, there are clear differences. In the commercial hubs of Zurich and Geneva, high levels of immigration from abroad and the high cost of living have now reached levels that are forcing people out. Neighbouring cantons like Aargau and Fribourg absorb this, and are recording by far the highest levels of internal migration.

The limits of labour migration’s benefits

How much do countries really gain by bringing in workers from abroad? In Switzerland, this has become a central question ahead of the June vote.

One answer comes from gross domestic product. In Switzerland, GDP has grown significantly in recent years. Critics argue that the country has not benefited disproportionately.

Between 2000 and 2022, Switzerland’s GDP per capita grew by 23%, in line with the Western European average, including countries with far lower immigration.

What is clear is that the influx of workers relieves pressure on social security, especially the old-age and survivors’ insurance (OASI), which operates as a pay-as-you-go system. Today’s workers fund the pensions currently being paid out.

Without immigration, the retirement of the baby boomers would push the OASI towards financial collapse. But in the long-term, the problem returns. As soon as the ratio of workers to retirees falls, the pressure will return. This is because adding workers now means adding their pension claims later.

Growing competition for young people

Philippe Wanner says Switzerland’s “dependence on highly skilled migration” is a major risk.

With percentages of young people shrinking across Europe, this pool of talent could begin to dry up.

“According to classical economic theory, the retirement of the baby boomers in their countries of origin should cause labour shortages, creating opportunities for younger generations and pushing up wages,” says Wanner. Over time, the incentive to emigrate would be lower.

“In the future, it is uncertain whether Switzerland will still find all the workers it needs,” he adds.

In fact, many countries are no longer prepared to tolerate brain drain and are taking action. Italy and Greece, whose pension systems already heavily strain public finances, offer generous tax incentives to lure skilled workers to return. Poland and Romania are using tax incentives to keep young workers from leaving.

At the same time, many European governments have strengthened family policies or implemented measures explicitly designed to raise birth rates. This reflects the broad political consensus that ageing populations pose a threat.

According to UN projections, Africa’s population will continue to grow in the next century while populations elsewhere decline. For the EU, Eurostat forecasts a drop from 449 million in 2024 to 419 million in 2100, despite continued migration from outside the bloc. Europe’s major demographic transformation has only just begun.

The unknown variable

What these population projections do not yet take into account is the impact of artificial intelligence. In terms of the future, it is one of the great unknowns.

Some demographers and economists believe that gains from artificial intelligence could help offset labour shortages caused by demographic change and stabilise social security systems. This is the more optimistic scenario.

A more pessimistic view is that artificial intelligence could end the era of mass employment and upend the political and social order, bringing far-reaching consequences for birth rates and migration.

For now, demographic change is driving an increase of migration and creating a domino effect in key professions. Doctors who move to Switzerland from Germany are replaced in Germany by workers from Poland, who are then replaced by specialists from Ukraine and Belarus, and so on.

The chain continues like this until it reaches Central Asia. But in the remote parts of Tajikistan and Kyrgyzstan, no doctors are to be found.

Edited by Balz Rigendinger. Adapted from German by David Kelso Kaufher/ds