Blog Articles

In December 2016, Social Platform published a myth buster on investing in services to debunk some common misconceptions about the costs and impact of health, housing, social, employment and education services.

A presentation made at a Centre for European Policy Studies (CEPS) conference last Monday [30 January] by Florence Jaumotte, senior economist in the International Monetary Fund (IMF) Research Department, showed that there are many mistaken beliefs on the issue of migration that cannot withstand analysis. Indeed, the IMF study “Impact of Migration on Income Levels in Advanced Economies” presents strong evidence to contradict the populist discourse spreading in the European Union.

Firstly, migrants are not a burden to economic growth. Conversely, migration is a key factor ensuring a growing working-age population. According to the IMF, in the absence of immigration, the labour force would decline in most advanced economies in the coming years, putting further pressure on the public financing of old-age spending.

Secondly, migrants are not all low-skilled workers with little chance of entering the labour market in their hosting country. In fact, the share of high-skilled migrants has consistently increased over the last thirty years, and is now higher than the proportion of low- and medium-skilled migrants. The research even underlines an unexpected observation; in many advanced economies the share of migrants with higher education is actually greater than the share of highly educated natives.

Thirdly, it is essential to underline that both high- and low-skilled migrants have a positive effect on growth by raising productivity. While high-skilled migrants foster innovation and create a positive sense of emulation among high-skilled natives, low-skilled migrants contribute to economic growth in an indirect way. By occupying essential jobs that are deemed less attractive by native workers, they tend to encourage them to move to other sectors of the economy. Female migrant domestic and care workers also play an important role in allowing women to better reconcile work and family life, given Member States’ failure to provide appropriate services. The latter observation, however, should be considered carefully. In countries that already have a large share of low-skilled natives, migrants can be perceived as a threat to people in the most vulnerable situations in the sense that they are competing for the same jobs.

Fourthly – and perhaps the most important takeaway from this research – migration benefits the population as a whole, and not only affluent people. Indeed, the research paper demonstrates that the income per capita of both the top ten and the bottom 90 percent of earners increases thanks to migration. Moreover, migration has no negative effect on the Gini coefficient (a way of measuring inequality), which proves that it does not increase income inequality in hosting countries.

These results are of primary importance, as they clear up many myths and misconceptions on the impact of migrants on the societies hosting them. Nevertheless, the long-term positive effects of migration should not overshadow the fact that transition periods are critical for migrants that often face difficulties in entering the labour market upon their arrival in their new country. This is why Social Platform will try to identify and disseminate good practices of social and economic inclusion of migrants in 2017. As Florence Jaumotte pointed out, better recognition of their skills and education, adequate language training and appropriate labour market policies could be very useful tools