Last week, we reported that recent research by University College of London revealed that recent migrants pay more in taxes than they receive in benefits. The authors of the report, Professor Christian Dustmann and Dr Tommaso Frattini calculated that the positive fiscal contribution to of EU migrants amounted to £20bn in the decade to 2011. Here, we explore the report in detail and consider the impact migrants have on the UK’s economy.
Immigration Study: The Fiscal Effects of Immigration
Professor Christian Dustmann and Dr Tommaso Frattini investigated the fiscal impact of immigration on the UK economy with a focus on the period since 1995. The authors of the report indicated that when considering the resident immigrant population in each year from 1995 to 2011, it seemed that:
- immigrants from the European Economic Area (EEA) made a positive fiscal contribution even during periods when the UK was running budget deficits;
- contributions from immigrants from EEA countries since 2000 have been positive throughout; and
- there was strong positive contribution made by immigrants from countries that joined the EU in 2004.
Thus, Professor Christian Dustmann and Dr Tommaso Frattini concluded:
“With respect to the recently arrived immigrant populations, those who came to the UK after 1999, our analysis suggests that – rather than being a drain on the UK’s fiscal system – they have made substantial net contributions to its public finances, a reality that contrasts starkly with the view often maintained in public debate.”
EU Migrants ‘Highly Educated’
It seems from the report that, 62% of Migrants from Western Europe (i.e. France, Italy and Spain) who come to the UK each year, have a university degree compared with 24% of the British labour force. For the UK, this is good news as it now attracts the highest number of university educated migrants of any country in the European Union.
This has led to the Shadow immigration minister David Hanson stating:
“This report shows that immigration since 2001 has contributed to the public finances as well as to the economy. However, the impact of different kinds of immigration varies and the system needs to be fair – so we need stronger border controls to tackle illegal immigration and stronger action against employers who use immigration to undercut local wages and jobs, but we should welcome international university students who bring in billions.”
It is fair to say that the coalition are in agreement, that those who can make a positive contribution to the UK’s economy should be welcomed. It is also true to say that the harsh immigration policy may still be deterring those who are capable of making such contributions.
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