Migration is economically neutral says OECD report

The Organisation for Economic Cooperation and Development (OECD) has released figures which suggest that migration has a broadly neutral financial impact on countries which host large immigrant populations.

The OECD has published an edition of its Migration Policy Debates leaflet dealing with the benefits of migration for host countries. It says 'The study suggests the impact of the cumulative waves of migration that arrived over the past 50 years in OECD countries is on average close to zero, rarely exceeding 0.5% of GDP in either positive or negative terms'.

In some countries, such as Switzerland and Luxembourg, immigration has had a notable positive impact (+2% of GDP) but the report says 'Immigrants are thus neither a burden to the public purse nor are they a panacea for addressing fiscal challenges'.

'Migrants contribute more in taxes than they receive in benefits'

However, the leaflet goes on to say that immigration is, over all, a benefit to the host nations. It says 'In most countries, except in those with a large share of older migrants, migrants contribute more in taxes and social contributions than they receive in individual benefits.

'This means that they contribute to the financing of public infrastructure, although admittedly to a lesser extent than the native-born'.

The report says that there is no truth in reports that immigrants depend on benefits more than the host population. It says 'where immigrants have a less favourable fiscal position, this is not driven by a greater dependence on social benefits but rather by the fact that they often have lower wages and thus tend to contribute less'.

Migration has positive effect on GDP

The OECD leaflet goes on to say that immigration tends to have a positive effect on the GDP of host countries, though perhaps not on per capita GDP.

It cites a study conducted by researchers Boubtane and Dumont between 1986 and 2006 which showed that immigration tends to lead to a modest increase in economic growth in host countries.

The OECD says 'An increase of 50% in net migration of the foreign-born generates less than one tenth of a percentage-point variation in productivity growth'.

Impact varies from country to country

The study says that the effect of immigration will vary from country to country depending on several factors such as
  • The percentage of immigrants that come for work-related reasons
  • The age of the immigrants and the immigrant population
  • The level of education of the immigrant population(s).

Young, educated, working immigrants are, unsurprisingly, the most economically beneficial migrants for the host country.

Migration facts

The OECD says that
  • 'Migrants accounted for 47% of the increase in the workforce in the United States and 70% in Europe over the past ten years'. Most of those migrants who end up working, do not come as economic migrants but usually come as family stream migrants, humanitarian stream migrants etc.
  • Migrants contribute more in taxes than they receive in benefits. It also says that, where migrant populations have been settled for many years, migrants claim more, in line with the host population
  • Migrants contribute to economic growth by bringing skills and technological expertise

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