Do immigrants really affect the economy of a country?

Migratory movements are as old as the desire of the human being to go after the best conditions of life.

In this age of globalization, immigration is an increasingly present phenomenon, and the main cause is survival and the search for a better quality of life, although there are those who emigrate for other reasons.

While is true that Many of the migratory waves have been marked by phenomena such as wars, natural disasters, problems of violence, political problems, dictatorships or epidemics, basically, the main reason is economic.

Who emigrate seek to escape from a situation that makes them uncomfortable or where their lives they are in danger, as in the recent cases of Syria, the countries of the former Soviet Union and, in Latin America, the case of Venezuela.

How true is it that a country’s economy is affected as more immigrants arrive?

The ups and downs of the economy
they depend on government policies, decisions and management, and in a small proportion are related to immigration.

Most assume that immigrants will not be able to support themselves and will have to seek the social assistance available in each country, which means an economic outlay from the government.

Emigration and economy they have a link that can be evidenced both in the receiving countries of immigrants and in the countries where their emigrants leave, which we will expand on later.

A widespread myth: More immigrants less employment

Many people from countries that receive more immigrants, such as the United States, Germany or the United Kingdom, They tend to think that the phenomenon affects them, especially in terms of employment.

What’s more, It is usually considered that if the country is to attend to a wave of immigrants, resources must be shared and that, since there are for them, there will be less for the natives.

That is one simplistic and shallow logic of the immigration effect, since several studies made by multilateral organizations such as the UN, IMF or the ILO reveal the positive effects on the economy.

For example, in a survey conducted in fifteen European countries, It was evidenced that for every 1% increase in the population of a country caused by immigration, its GDP grew by 1.25 and 1.5%.

Studies in the United States have shown that immigrants have improved the productive capacity of their economy, they have increased investment and promoted specialization.

On the other hand, there is no evidence that an immigrant evicts native workers from a certain country, rather, when it comes to choosing a job competition prevails, which occurs in any nation. Nor are all the doors of the labor market closed, so there is always the possibility of employment.

Other studies have shown that the increase in the labor supply of a country produced by immigrants generates only a small effect on wages, which could well be for better or for worse. In the worst case, a 1% increase has caused wages to fall by 0.2%.

Currently, more than 240 million people in the world are international migrants, and people who emigrate from countries like Syria represent a small percentage.

On the other hand, of the total number of migrants in the world, only 10% are refugees, and they are the ones that have produced the least impact, because many nations have signed international agreements to receive them.

Therefore, it is inferred that the rest of the emigrants do so due to working conditions, or to be next to relatives who are better located in their jobs.

Emigration and its impact on the economy

It is obvious that the economy stimulates emigration, Hence, there is an impact both in the receiving countries of immigrants and in the countries from which the emigrants leave.

According to a study by the Organization for Economic Cooperation and Development, OECD, emigration:

  • It has created 47% of the total increase in the workforce in the United States, and 70% in the European Union, improving and fostering groups in the expanding economy and the formation of new groups in the population with a productive age, compared to older and inactive groups.
  • Due to the increase in the labor supply there may be a decrease in real wages in the host market, and this increase in people working, with fixed incomes, drives the economy, produces economic growth and increases the per capita income of the host country.
  • Likewise, there is evidence that immigrants benefit the technological development of society.
  • Since the majority of immigrants entering the receiving countries are of productive age, these they remain in that country for work reasons, which means that they are profitable and pay more social security and taxes.
  • What’s more, It has been shown that the wave of migrant workers completes the labor market of the receiving population, but does not replace it. while allowing greater dynamism of the economic market in general.

On the other hand, there is the real economic impact produced by immigration in the countries of origin, which is evidenced in:

  • The reduction of demographic pressure and the loss of the population of productive age, that is to say, the youngest, with the greatest abilities and the best qualified.
  • Decrease in economic growth due to the active population being outside the country.
  • There is an increase in the reception of foreign currency sent by emigrants, which activates the consumption of the internal market of the issuing country.
  • What’s more, the mass departure of the working age population has a negative impact in the generation of replacement and produces a fiscal deficit.

Migratory movements continue to be an increasingly common and logical phenomenon today marked by globalization, which has undoubtedly generated deep economic differences between countries.

All countries should have a better disposition to migratory movements, as well as a better propensity to stimulate and normalize them.

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