OECD BETTER POUCES BETTER LES Migration Policy Debates www.oecd.org/migration May 2014 The economic impact of migration has been intensively studied but is still often driven by ill-informed perceptions, which, in turn, can lead to public antagonism towards migration. These negative Wews risk jeopardising efforts to adopt migration policies to the new economic and demographic challenges facing many countries. This edition of Migration Policy Debates looks at the evidence for how immigrants affect the economy in three main areas: The labour market, the public purse and economic growth. Is migration good for the economy? Migration is a feature of social and economic life across many countries, but the profile of migrant populations varies considerably. In part this is because of the variety of sources of migration. In much of Europe, for example, citizens enjoy extensive rights to free movement. In Australia, Canada and New Zealand, managed labour migration plays an important role. Other sources include family and humanitarian migration. Whatever its source, migration has important impacts on our societies, and these can be controversial. The economic impact of migration is no exception. Benefit or burden – what’s the reality? To answer this question, it can be helpful to look at migration’s impact in three areas – the labour market, the public purse and economic growth. Labour markets Migrants accounted for 47% of the increase in the workforce in the United States and 70% in Europe over the past ten years. Migrants fill important niches both in fast-growing and declining sectors of the economy. Like the native-born, young migrants are better educated than those nearing retirement. Migrants contribute significantly to labour-market flexibility, notably in Europe.
The public purse Migrants contribute more in taxes and social contributions than they receive in benefits. Labour migrants have the most positive impact on the public purse. Employment is the single biggest determinant of migrants’ net fiscal contribution Economic growth Migration boosts the working-age population. Migrants arrive with skills and contribute to human capital development of receiving countries. Migrants also contribute to technological progress. Understanding these impacts is important if our societies are to usefully debate the role of migration Such debates, in turn, are essential to designing policies in areas like education and employment that maximise the benefits of migration, especially by improving migrants’ employment situation. This policy mix will, of course, vary from country to country. But the fundamental question of how to maximise the benefits of migration, both for host countries and the migrants themselves, needs to be addressed by many OECD countries in coming decades, especially as rapid population ageing increases demand for migrants to make up shortfalls in the workforce.
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