New Report Highlights Economic Benefits of Immigration – and the “Perception Disconnect”

Migration and the Economy: Economic Realities, Social Impacts, & Political Choices is a September 2018 report by Citi GPS and the Oxford Martin School at the University of Oxford.    The 172 page report looks at the impact of “immigration on advanced economies”, drawing the overall conclusion that immigration is vital for economic growth.  The report also attempts to “throw light on the growing disconnect between public perceptions regarding migration and the actual trends.”

Some of the report’s key findings (paraphrased from the executive summary) include:

The stock of migrants has grown materially worldwide since 1990 but still accounts for only around 3% of the global population.  As the earth’s population has grown, the number of immigrants has too, but as a percentage, the number of immigrants remains the same as a century ago.

Skilled migration is especially concentrated in certain countries and urban centers.   The 34 member countries (including the U.S.) of the Organization for Economic Cooperation and Development (OECD) absorb about two-thirds of high-skilled immigrants worldwide, but the U.S. is the destination country for nearly half of those, and for nearly a third of high-skilled immigrants worldwide.  Immigrants also cluster in certain “dynamic” urban areas, with policy implications.

Even at times of acute crisis, evidence indicates most people do not emigrate, and data rebuts nationalist rhetoric “portraying migration as an unstoppable tsunami.”  The report examined countries with periods of sustained financial crisis, and found that most people prefer to stay put where they could rely on family and friends for support.

Migration will be essential to alleviate demographic headwinds.  Worldwide, the population of people over 60 is expected to more than double by 2050, while over half of all countries (the U.S. included) now have fertility rates that are below replacement level.  Meanwhile, in 2017, three-quarters of the world’s immigrants were of working age, compared to only 57 percent of the global population.  Ironically, some of the countries with the worst demographic challenges are currently the most opposed to immigration.

Overall, immigration is conducive to native and aggregate prosperity, especially over the long term. For example, the report finds that from 1990-2014, economic growth in the U.S. would have been 15% lower without immigration – enough to cancel out the post-recession economic gains.

The fiscal impacts of immigration are positive, with some “small, short-lived and localized” costs.   Overall, immigrants consume fewer benefits than natives, and make up for any costs through their tax contributions over time.

Immigration drives innovation.  The report finds that ideas and innovation are stimulated by increases in highly educated workers and by diverse workplaces, both of which immigration generates.  In the U.S., the industries accounting for the highest economic and productivity growth have high concentrations of immigrants.  Over 40% of global patents are filed by immigrants.

Public attitudes towards immigration relate to factors other than reality. Factors such as solidarity of social values, that can inspire nationalism, and the belief that resources are scarce, influence public attitudes.  The greater the nationalistic outlook and belief in scarce resources, the greater the likelihood that a person will oppose immigration.  Multiple polls show that the public often believes there are far more immigrants in their country, and that they use far more public benefits, than is truly the case, compounding the problem.

The report goes on to note that the “growing politicization of migration on a value basis, rather than an economic one, is …. making it difficult to properly highlight the economic case for migration,”  which in turn will harm the economies that have benefited from immigration.   It urges that “balance and perspective” be restored to the debate around immigration.

Among many recommendations, the report notes that academia, government, communities and national policy makers have important roles to play to stem the tide of anti-immigrant sentiment that is disconnected from reality and threatens continued growth of the nations that have long benefited from immigration.

The report includes the business community in its recommendations, noting that businesses must “(b)e more vocal in articulating their needs and the overall benefits of migration.”

You can find the full report here.