Positive economic impact of UK immigration from the EU - YouTube

What we do in this paper is to investigate the fiscal net contribution of immigrants.

We focus on immigrants who came after 2000 and we consider the period between 2000 and

2011.

So the main body of the paper is concerned with trying to understand whether they have

paid more

or less in terms of taxes than what they received in terms of benefits.

And what we find is that all immigrant groups who came to the UK since 2000 have made

positive fiscal contributions to the country over a period in which the country was running

overall a budget deficit so the average native was making a negative fiscal contribution,

and this is true for all groups of origin.

So we distinguished between different groups of immigrants: immigrants coming from

non-EA countries; immigrants coming from EEA 15 countries, so the old European countries

such as

Germany, France and Italy; and immigrants coming from the new accession countries –

Poland, Hungary,

Bulgaria, Czech Republic and others. Now for all three groups, we find that over the period

between 2000 and 2011, for those who arrived after 2000, the net fiscal contribution is

clearly

positive – that means they paid more in terms of taxes than what they received in

terms of

transfers and benefits.

By transfers we mean welfare provisions, tax credits, and we specifically look at that.

But we additionally, when we do our overall fiscal analysis, we not only look at direct transfers,

but we also look at the services that the individuals receive and that are paid for

by the state,

for instance road maintenance, fire services, street lighting and so on.

So we do account for all public expenditures in our analysis, and what it is important

to stress is that

some of these expenditures are fixed, regardless of the size of the population.

Take the army for instance – the UK needs an army that is the same size, regardless

of the number

of immigrants that are in the country at any point in time, so that's an expenditure

that the UK government would have to bare in any case, and the fact that you have

more people in the country means that you can spread that course over a larger pool

of people,

which in some sense means that immigrants are allowing savings on some fixed public

expenditures

to UK residents.

An interesting aspect of looking at what immigrants actually contribute is what

education do they bring with them and where do we find them in the labour market.

So usually immigrants come educated – somebody must have paid for that education,

and what we do in this paper is to assess the contribution immigrants make to the UK economy

by endowing the UK economy with skills and education, which has been paid for by

their country of origin, so for those immigrants who come between 2000 and 2011,

we find that over that 11-year period, they endowed the UK labour market with education,

which would have costed the UK tax payer if it was generated in the UK in the magnitude

between 6 and 7 billion pounds.

Especially recent immigrants, and particularly those from the new accession countries,

have very high employment rates, so they have very high participation in the

labour market compared to both UK natives and to other immigrant groups.

So, that is an indication that they come here primarily for working, and thus they do not

take much advantage of the welfare provisions that are available to them.

What we are looking at in this paper is the fiscal contribution of immigrants –

we are not looking at the labour market, we are not looking at their possible impact on wages,

we are not looking at their possible impact on innovation or economic growth –

these are other aspects which we don't touch upon in this particular study,

and we hope people do that in future research.