Arrival of asylum seekers does not lead to deterioration in economic performance
Over 1 million people claimed asylum in European Union countries in 2015, making it a record year.
On the contrary, the economic impact tends to be positive as a proportion of the asylum seekers become permanent residents, according to economists from the CNRS, Clermont-Auvergne University, and Paris-Nanterre University in France, who have estimated a dynamic statistical model based on 30 years of data from 15 countries in Western Europe.
Traditional approaches to understand the economic and fiscal impact of these migration flows mainly adopt an accountancy approach - they compare the taxes paid by the immigrants with the public transfers paid to them, but do not take into account the economic interactions.
The researchers used a statistical model introduced by Christopher Sims, who was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 2011.
Widely used to evaluate the effects of economic policies, this model lets the statistical data speak for itself by imposing very few assumptions.
The macroeconomic data and data on migration flows concern 15 countries in Western Europe: Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Norway, the Netherlands, Portugal, Spain, Sweden, and the UK.
The flows of asylum seekers are made up of people who have a legal right to reside in the host country while their application is processed; the host country will consider them to be residents only if their asylum application is granted.
During the period studied (1985-2015), Western Europe experienced a significant increase in the flows of asylum seekers following the wars in the Balkans between 1991 and 1999 and, after 2011, in the wake of the Arab Springs and the conflict in Syria.
These events provide numerous opportunities to test the consequences of an unforeseen increase in migration flows on GDP per capita, the unemployment rate, and public finances.
The researchers show that an increase in the flow of permanent migrants (ie not asylum seekers) at a given date produces positive effects up to four years after that date: GDP per capita increases, the unemployment rate falls, and additional public expenditure is more than compensated by the increase in tax revenues.
In the case of asylum seekers, no negative effect is observed and the effect becomes positive after three to five years, when a proportion of asylum seekers obtain asylum and join the category of permanent migrants.
According to these results, it is unlikely that the ongoing migration crisis is a burden for European countries; on the contrary, it could be an economic opportunity.
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