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The ‘Consistently Positive Fiscal Contributions’ of Immigrants to the UK

At RefuNet, we love sharing ‘myth busters’ with our social media followers in order to disprove common misconceptions surrounding refugees and asylum seekers. In the latest of these, we used a UCL article to fact-check the idea that foreigners in the UK negatively affect the economy. However, there was not space in the social media post to explain why the belief is inaccurate, so we hope that this blog post will do exactly that. To do this, we have used the same UCL article which is linked below.


A significant aspect of the heated debate around immigrants and the economy concerns the benefits system. However, Dustmann and Frattini have found that immigrants in the UK between 1995 and 2011 were ‘generally less likely than natives to receive state benefits or tax credits and also less likely to live in social housing as natives in the same region’. More specifically, ‘EEA immigrants ... are 7.8 percentage points less likely than natives to receive transfers or state benefits, and non-EEA immigrants ... are 1.3 percentage points less likely to be benefit recipients’.


Another way in which immigrants actually save taxpayers’ money is due to their education tending to have been funded by their country of origin. For example, ‘between 1995 and 2011 European immigrants endowed the UK labour market with human capital that would have cost £14 billion if it were produced through the British education system. Likewise, over the same period, annuities of non-European immigrants’ education amounted to an implicit savings of more than £35 billion’.


In terms of public expenditures more generally, through foreigners in the UK paying their taxes and thus ‘sharing the cost of fixed public expenditures ... they have reduced the financial burden of these fixed public obligations for natives’. This reduction is estimated at around £24 billion between 2001 and 2011.


As explained in the first paragraph, this blog post was intended to elaborate on the UCL article we used for our latest myth buster. However, as Dustmann and Frattini do not specifically refer to ‘refugees’ or ‘asylum seekers’, we thought it would be beneficial to add some information from the award-winning science writer Amy Maxmen who does. She says ‘asylum seekers also benefit economies, but their effects take longer to transpire [than economic migrants] — from three to seven years — and the boon is less obvious’. That said, Maxmen goes on to explain that this is not out of choice – it is because ‘people seeking refuge often face restrictions on working’ (in addition to not being allowed to work, asylum seekers do not have access to the education system until they have been in the UK for six months!). Maxmen’s article is also linked below.


If you believe that asylum seekers should have the right to work and sustain the ‘consistently positive fiscal contributions’ of immigrants to the UK, please write to your MP at https://act.refugee-action.org.uk/page/100984/action/1?ea.tracking.id=W1


References:

Dustmann & Frattini, ‘The Fiscal Effects of Immigration to the UK’, https://www.cream-migration.org/files/FiscalEJ.pdf (2014)

Maxmen, ‘Migrants and refugees are good for economies’, https://www.nature.com/articles/d41586- 018-05507-0 (2018)

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