The impact of immigrants – it’s not what you think

Migration Outlook 2013
Click to read the report

In the land of tabloid terrors, immigrants loom large. Flick through the pages or online comments of some of the racier newspapers, and you’ll see immigrants being accused of stealing jobs or, if not that, of being workshy and “scrounging benefits”.

Such views may be at the extreme end of the spectrum, but they do seem to reflect a degree of public ambivalence, and even hostility, towards immigrants in a number of OECD countries. Anecdotal evidence is not hard to find. A columnist from The Economist reported this encounter between a British legislator and one of his constituents, Phil: “‘I’m not a racist,’ says Phil, an unemployed resident of the tough Greenwich estate in Ipswich. ‘But we’ve got to do something about them.’”

Surveys offer further evidence: For example, a 2011 study in five European countries and the United States found that at least 40% of respondents in each country regarded immigration as “more of a problem than an opportunity”. More than half the respondents in each country also agreed with the proposition that immigrants were a burden on social services. This sense that immigrants are living off the state appears to be widespread. But is it true?

New research from the OECD indicates that it’s not. In general across OECD countries, the amount that immigrants pay to the state in the form of taxes is more or less balanced by what they get back in benefits. Even where immigrants do have an impact on the public purse – a “fiscal impact” – it amounts to more than 0.5% of GDP in only ten OECD countries, and in those it’s more likely to be positive than negative. In sum, says the report, when it comes to their fiscal impact, “immigrants are pretty much like the rest of the population”.

The extent to which this finding holds true across OECD countries is striking, although there are naturally some variations. Where these exist, they largely reflect the nature of the immigrants who arrive in each country. For example, countries like Australia and New Zealand rely heavily on selective entry, and so attract a lot of relatively young and well-educated immigrants. Other countries, such as in northern Europe, have higher levels of humanitarian immigration, such as refugees and asylum-seekers.

That said, there’s been a general push in many countries in recent years to attract better educated immigrants, in part because of the economic value of their skills but also because such policies attract less public resistance. For example, a survey in the United Kingdom, where resistance to immigration is relatively high, reported that 64% of respondents wanted to reduce immigration of low-skilled workers but only 32% wanted fewer high-skilled immigrants. Indeed, one objection that’s regularly raised to lower-skilled immigrants is the fear that they will live off state benefits.

But, here again, the OECD report offers some perhaps surprising insights. It indicates that low-skilled migrants – like migrants in general – are neither a major drain nor gain on the public purse. Indeed, low-skilled immigrants are less likely to have a negative impact than equivalent locals.

Useful links

International Migration Outlook 2013

OECD work on migration

OECD Insights: International Migration

Immigrants take the brunt of the jobs crisis

Immigrants were key drivers behind the economic boom, as they added skills and productivity to lift performance. Now, almost everywhere migrants are feeling the brunt of the crisis. Immigrants are particularly vulnerable during prolonged economic downturns, and this crisis has had the effect of throwing many immigrant workers out of work at a higher rate than for native-born workers. One reason is that immigrants tend to work in sectors which are sensitive to swings in the economic climate, that is, where demand for workers rises sharply in good times and drops fast during bad. (more…)