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Impact of immigration

Economic growth

Popular mythology suggests that immigrants are 'taking' something from their new countries - though in reality they often make an essential contribution.

Is immigration economically damaging? History suggests otherwise. After all, the world's remaining superpower, the United State is populated almost entirely by immigrants and their descendants. It has doubled its population over the past century—and become richer and richer. Other high immigration countries are also among the world's wealthiest. In fact, of the major industrial economies only Japan has not had a significant influx of migrant workers.

An analysis for 15 European countries over the period 1991-95 found that for every 1% increase in a country's population through immigration there was an increase in Gross Domestic Product of 1.25% to 1.5%. Of course this does not necessarily mean that immigration caused the increase in wealth. But would Germany or the USA be as successful without their immigrant workers? A more reasonable conclusion is that all these countries have used immigrants to become richer.

Nevertheless, some people protest that immigrants take the jobs of native workers. At its most simplistic, this is based on the 'lump of labour fallacy' — a belief that the number of jobs in any country is fixed, so if more people come there will be fewer jobs to go round. This is clearly false. Adding more people, either by natural population increase or by immigration, does not necessarily reduce average national income, and may well increase it. This is not just because many immigrants do jobs that local workers cannot — or will not — do but also because they create work for others.The problem for immigrants is that while the jobs they take are visible, the jobs they create for everyone else are largely invisible.

Some immigrants are also deliberately attracted for the jobs they will create. A number of countries, including the US, run immigrant investor schemes

New York at night

New York is a city constantly refreshed by waves of migration. It is also one of the world's richest.
Photo: © P J Partridge