Are immigrants a burden on the finances of host countries? A study released on Thursday (28) by the OECD (Organization for Cooperation and Development), with data from 25 of its member countries over a period of 13 years, showed that the contributions of immigrants in fees and taxes were greater than the expenses governments with social protection, health and education for them.
The OECD has 38 members, including Germany, Chile, Japan and Turkey. The survey measured the fiscal impact of immigrants in 22 European countries, plus the US, Canada and Australia, from 2006 to 2018.
The balance was positive in all of them, with contributions from foreigners being sufficient to fully cover the share of government spending allocated to them and, in most countries, even exceeding this amount — although not very significantly (on average, 1 .56% of GDP).
In almost all countries analyzed, government spending per capita on social benefits was lower on immigrants than on those born in the country—the average was 12% less. Expenses related to education, health, disability and aging were the most unequal.
In Italy, for example, total per capita government spending on foreigners between 2006 and 2018 corresponded to 64% of spending on those born in the country. Contributions from foreigners, however, were also proportionally lower than those from natives. The main explanation for this difference is their lower access to jobs.
If they had work opportunities and salaries compatible with those of the general population, they would pay more taxes, recalls the report. “This means that effective integration programs are very valuable investments, with high returns in tax terms.”
In almost all the countries analyzed, more than half of the immigrants are between 25 and 54 years old, the age group with the most favorable fiscal balance. The greatest contributions were registered in countries that attracted large flows of labor immigrants, especially those with high education.
The report says that, in the context of the Covid-19 crisis, it is even more important to have data that shows “the fiscal impact of immigrants, whether they are taxpayers or a burden on public finances.”
Pandemic stopped migratory flow
The report also brought data on the migration flow to these countries in 2020, the lowest since 2003, with 3.7 million people — an effect of the pandemic. The fall occurred in all categories, but especially in family migration (more than 35% decrease). Labor migration was 25% lower, and the number of study visas dropped 70% in the US and Canada and 40% on average across EU countries.
Migration to temporary work also fell, especially in Japan (66%) and South Korea (57%). The number of new asylum applications dropped by 31%. One of the smallest declines occurred among temporary migrants working in agriculture. There was a 10% decrease in the overall average, and in some countries a slight increase was registered — as in the USA and Poland.
The crisis resulting from the pandemic has also affected access to work among foreigners, interrupting a decade of progress in this regard. More than two-thirds of them were employed in 2020, 2.1 percentage points less than in 2019, and 1 in 10 immigrants was unemployed last year, compared to 1 in 15 the year before. The rate of employed immigrants in 2020 fell in three out of five OECD countries, and the unemployment rate rose in three out of four.
Despite the drop in the migratory flow in the year of the pandemic, when analyzing data from the last decade, the proportion of immigrants in OECD countries increased. On average, people born abroad account for 14% of the total population of these nations in 2020 — in 2010, they were 11.9%. With the exception of the Balkan countries and Israel, all had an increase in the immigrant population in the period.
The largest increase relative to the total population occurred in Luxembourg (9 percentage points), Iceland (8 points) and Sweden (6 points).
​The balance of the tax contribution of immigrants in each country (in % of GDP)
Luxembourg: 7.64%
Australia: 3.46%
Switzerland: 3.18%
Canada: 2.16%
Great Britain: 2.02%
Italy: 1.87%
Portugal: 1,79%
Spain: 1.7%
Austria: 1.67%
Ireland: 1.57%
Germany: 1.54%
Belgium: 1.38%
Norway: 1.34%
Greece: 1.24%
France: 1.02%
Sweden: 1%
USA: 1%
Denmark: 0.87%
Netherlands: 0.85%
Slovenia: 0.68%
Czech Republic: 0.37%
Latvia: 0.28%
Lithuania: 0.23%
Finland: 0.13%
Estonia: 0.05%
Overall average: 1,56%
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