Immigrants and the public purse

The fiscal implications of migration – that is whether immigrants are a burden on, or net contributor to, the public purse – has been the basis of much public discussion on immigration. Studies and analysis using varying (and sometimes questionable) methodologies have been made supporting both sides of the argument. But now the OECD has thrown itself into the ring, conducting a ground-breaking cross-country analysis of 28 OECD countries (blogged about by the authors here and Michael Clemens here).

Their findings show that employed immigrants do have a positive impact on the public purse. This positive impact, however, is largely offset by immigrants that are unemployed. When the authors combine these two groups they find that “the [fiscal] impact of the cumulative waves of migration that arrived over the past fifty years in OECD countries is on average close to zero, rarely exceeding 0.5% of GDP in either positive or negative terms.”