Europe is suffering from dire demographic trends with fertility rates in most countries below self-replacement rates – implying populations are set to decline. It also means the share of elderly, which already exceeds the global average, will rise further, Moody's Analytics said.
A wave of migration could increase the size of the labour force, boost the economy and make pension schemes more sustainable.
Martin Janicko, economist at Moody’s Analytics, said: “Most migrants are younger than the majority population, which is good news for ageing Europe.
"While low fertility is the primary problem, increasing life expectancy is adding to the region's woes. Only a handful of countries including France, the UK, Ireland and Sweden have total fertility rates close to 2.07 births per woman, the rate needed to keep the population from declining. The populations of Germany, Italy, Spain and Greece, which have rates well below that, contracted last year.”
But Janicko warned that governments should not be complacent about the influx of migrants, saying it could "burden host countries’ social provisions and push down blue-collar wages"
"Whether the European Union will benefit depends largely on how fast and how successfully its member states can integrate the new arrivals into the labour market," he said.
Researchers at consultancy Oxford Economics recently estimated that if a million extra asylum seekers entered Germany it could raise its GDP by 0.6 per cent by the end of the decade.