Evidence shows immigration is a boon to economies

Immigration is contentious, and election campaigns worldwide have alleged that immigration deprives locals of jobs and that refugees are a burden. 

Such terms are completely at odds with the overwhelming evidence that immigration is positive for destination countries, departure countries, and immigrants themselves.

Far from being a burden or a cost, immigrants are a boon to economies. Ireland would benefit from a more open attitude to immigration, whether those migrants are economic, asylum-seekers, or refugees.

Our recent experience bears this out. Our economy and society benefited from Ireland’s decision to be one of the few EU members to welcome migrants from the new accession states in 2004.

The World Bank has estimated that increasing immigration by a margin equal to 3% of the workforce in developed countries would generate global economic gains of $356bn (€327bn).

One of the most frequent objections to immigration is that immigrants take jobs from locals. This only makes sense if you think that an economy has a fixed number of jobs to be shared around. If an immigrant gets one of those precious jobs, then a local must lose out.

Economies don’t work like that. At the end of 1998, there were 1.5m people in employment in Ireland. Just over 10 years later, the number was 2.1m people.

At the end of 2016, there were 2.05m people in employment. The number of jobs is not fixed. Economies are dynamic and immigrants enhance that dynamism.

Far from taking jobs, the evidence indicates that immigrants create jobs. Immigrants are not just workers, but are also consumers. They buy goods and services with the wages they earn, and that consumption creates jobs for others, including for local workers. Immigrants also set up new businesses.

The type of person who takes the risk to move to another country for new opportunities is also the type of person who is entrepreneurial and risk-taking. They are just what an economy needs to grow.

There is also a myth that immigrants are intent on exploiting our welfare state by claiming benefits and being a cost to the hard-working Irish taxpayer.

With alarming lack of awareness, opponents of immigration will argue that immigrants steal jobs and abuse social welfare payments. There is no evidence that immigrants are more likely to receive social welfare payments than the native population.

Immigrants are net contributors to the Irish exchequer, and just a little thought would make it clear why that is so. Most immigrants are young and healthy and so are not users of public health services. They have already completed their education and Ireland benefits from that, though it hasn’t paid for it.

Most immigrants to Ireland, like the Irish that go to live abroad, are temporary. The intention may be to work and save, before returning home.

This means the tax paid by immigrants will not even be used to fund their pensions. But immigrants pay taxes at the same rate as every other worker.

The economic and social benefits of immigration are not just based on their financial contribution. They also bring knowledge and skills that may be lacking in the native population. A recent study showed that over half of high-tech start-ups in Silicon Valley had at least one foreign-born owner.

While the benefits to destination countries from immigration are clear, there are also benefits to the countries that immigrants leave. Returning migrants, as has happened in Ireland, bring back skills, networks, and savings.

Remittances to developing countries in 2015 amounted to $432bn. Total development aid for developing countries is approximately $135bn. Remittances also go directly into the pockets of poor people and into their local economies, rather than development aid being filtered through governments and NGOs.

Dr Declan Jordan is senior lecturer in economics at Cork University Business School.


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