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Competence Centre on Foresight

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  • Page | Last updated: 08 Sep 2020

Social, economic and fiscal effects of immigration into the EU

  • In general, migrants contribute as much to public finances in taxes as they receive in benefits, i.e. the net fiscal impacts of immigration are minimal. This fiscal impact depends on the characteristics of migrants, with young, in work, highly skilled migrants often representing considerable net gains for public finances.
  • Non-EU migrants are sometimes portrayed as a strain on public finances and a threat to host countries’ welfare systems. However, once differences in age structure, gender, family composition and educational attainment of the two groups are accounted for, research shows that in most countries, immigrants receive social benefits as often as natives.
  • In the short-term, refugees and asylum-seekers represent net fiscal burdens with high social costs and low employment rates.
  • A JRC simulation of the social, economic and fiscal effects of rapidly increasing forced immigration into the EU suggest that in the medium- to long-term, the short-term costs of refugee integration such as language and professional training may be significantly outweighed by socio-economic and fiscal benefits.
  • Depending on integration policies, the annual long-run GDP effect could be 0.2 per cent to 1.4 per cent above the baseline growth, and a full repayment of the integration policy investment could be achieved after 9 to 19 years.

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