Is A High Net Migration Rate Good for the Economy?

Migration has important impacts on our societies, and these can be controversial. The economic impact of migration is no exception. Benefit or burden – what’s the reality?

Pros

Labour markets:

1) Migrants accounted for 47% of the increase in the workforce in the United States and 70% in Europe over the past ten years.

2) Migrants fill important niches both in fast-growing and declining sectors of the economy.

3) Like the native-born, young migrants are better educated than those nearing retirement.

4) Migrants contribute significantly to labour-market flexibility, notably in Europe.

Economic growth:

1) Migration boosts the working-age population.

2) Migrants arrive with skills and contribute to human capital development of receiving countries.

3) Migrants also contribute to technological progress.

Cons

However, high net migration rate may cause political upheavals and instability to the economy (eg Brexit). Other occurring problems caused by net migration is a rise in the dependency ratio, higher demand on government resources, and public congestion. A high dependency ratio can be a factor caused by net migration because typically a productive migrant will bring his/her other family members (such as retired parents and school going children) who are dependent on him/her.