Thursday, June 20, 2013

OECD Finds Immigration No Burden on Public Finances

Several publications, including The Economist and The Financial Times reported on a recent OECD report, International Migration Outlook 2013, which states the costs & benefits of immigration on their respective 33 member states in terms of costs to their public finances. The OECD’s overall conclusion is that “migration is neither a significant gain nor drain for the public purse” with an average positive contribution of .30% of GDP in 2007-09.” For example, Germany was the worst off with -1.13% of GDP, the U.S. with 0.03%, the Netherlands with 0.40%, and Luxembourg experienced the highest positive impact with a contribution of 2.02% by migrants on the public finances, basically consisting of the net impact of taxes, VAT, welfare, education and health costs. The Economist acknowldeges that this is “not the lastword on this issue”, but “does show that the extremes of the debate are just that – extremes.”  The Financial Times has nothing else to add than repeating the reports's claim that "Immigration into the world’s largest economies has a negligible effect on the public finances of host countries...."
This reporting by these two publications highlights the conclusion that immigration does not cause a major burden to the recipient economies. Well, that's interesting to know, but why not look at the OECD report's conclusions from a different perspective: apparently immigration does not contribute significantly to the migrant importing countries' public finances. If that's the case, why should the world's largest economies even bother with allowing immigration on a large scale (by 2011, foreign born residents of OECD countries reached 12.5% of the population) - with the exception of ad hoc needed specialized workers or political refugees - ? I would maintain that it would be better for the migrants exporting and importing countries and the state of the world, if their respective economies would do well and support their local populations, rather than force people to leave their countries out of lack of choice and opportunity. I find it striking that neither The Financial Times nor The Economist, generally publications exemplary of intellectual curiosity, do not question the conventional thinking about immigration, or raise questions about the OECD's interpretation of its findings.

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