GDP and low IQ immigration II

In the last blogpost we saw that the GDP-IQ relationship in multiethnic societies is probably roughly the weighted sum of the GDP predicted by the mean IQs of all ethnic groups. This indicates that low IQ immigration retards economic growth in a predictable fashion.

I don’t analyze this question to assign blame or even to make policy proposals, but simply to predict the future. It is a fact that in many Western countries the relatively high IQ native population is slowly being replaced by immigrants that on the whole don’t show the same cognitive performance (as measured for example by IQ-tests, PISA or other scholastic tests [1]).

In developed countries, economic growth generally isn’t very high. If the relative growth of the lower performing section of the population manages to significantly retard or even completely stall economic growth, we are in for a bad time.

In our first simulation we will compare the per capita economic output of a country, where the native population has a fertility rate of 1.4 and the missing kids are replaced by immigrants that show a 10 point IQ gap compared to the natives. This is roughly the situation of Germany and both in birth rate and IQ gap relatively extreme.

We use only the population between 20 and 65 for the calculation of GDP, the working age population. We also assume a simplified scenario, where suddenly the birthrate drops from replacement rate to 1.4 and the missing working age people are replaced by a homogenous immigrant group to hold the population exactly steady. Also all mothers are exactly 30 years old.

These artificial assumptions lead to a slightly bumpy ride. We see that the first twenty years nothing happens, because the missing kids aren’t working age yet. Then further thirty years down the road the decline speeds up, because the next generation of of mothers is now already coming from a low fertility generation. Then we hit the point where immigrants start leaving the workforce …

But the overall picture of a more detailed simulation wouldn’t be very different. Over 80 years the GDP drops to 66% of what it would be with a completely native population. Of course in reality this happens against the backdrop of economic growth stemming from productivity growth through innovation.

In developed countries the annual growth rate seems to hover around 2% [2]. This should already include immigration effects, but we can use it as a conservative estimate of possible future growth. In the second figure we see how the effect of low IQ immigrants making up an increasing share of the population plays out against a backdrop of 2% growth.

Fortunately, even these relatively extreme settings with low fertility and a big IQ gap do not seem to threaten to stall the economy completely. This makes sense because a 34% decline over 80 years corresponds to a shrinking of half a percent per year, which can still be set off by a normal rate of growth.

[1] IQ gap via PISA
[2] Euro zone economic growth

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