Working paper 573 Key messages The fiscal impact of immigration A review of the evidence Gemma Hennessey and Jessica Hagen-Zanker April 2020 • The evidence offers no definitive answer as to whether migrants are net fiscal contributors or net burdens, as the fiscal impact of immigration is highly context-dependent. • In general, the net fiscal impacts of immigration are minimal, hovering around plus or minus 0% of countries’ GDPs, meaning that migrants contribute as much to public finances in taxes as they receive in benefits. • This holds true in high-income and low- and middle-income countries (although the evidence base on the latter is scant). The evidence runs counter to negative public narratives that depict migrants as a strain on public finances and a threat to welfare systems. • Fiscal impact depends on the characteristics of migrants, with young, in work, highly skilled migrants often representing considerable net gains to public finances. • Fiscal impact also depends on the policy environment within host countries, including the extent to which labour markets absorb migrants, the informality of labour markets and migrants’ rights to work and receive welfare benefits.
The fiscal impact of immigration
Aug 03, 2023
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