Is European economic prosperity really dependent on mass immigration?

Senegalese immigrants arrive on a boat to Los Cristianos in Spain
Senegalese immigrants arrive to Los Cristianos in Spain

The purpose of this article is to overview the issues and arguments surrounding the question of mass immigration to Europe. Its analysis is conceptually and in the use of available data focused on the last decade of immigration to what is now the European Union of 27 member states. In doing so, it takes a critical stand on those arguments suggesting that Europe, for various reasons related to the economic growth, needs large-scale immigration in order to preserve its wealth and way of life to the future. Our analysis shows that when taken in the overall perspective, that is, when the immigration of low- and high-skilled workers is calculated together with public expenses with which the issue of immigration is connected and with tax gains that immigrants bring, the net economic gain is very low or none. However, although not being the focus of our present text, the underlying theme of this work is also to suggest that immigration needs to be consider also from other then economic terms and the results of our analysis cannot be taken as sole factor for providing political decisions on immigration to European countries.

In approaching our topic, we first make an overview of immigration trends to Europe. This overview provides both empirical and theoretical background information required for our subsequent evaluation of the arguments of official EU bodies and commentators, who claim that mass immigration is economically beneficial, and indeed necessary, for Europe.

Overview of the Contemporary State of Immigration in the European Union

The European history has been shaped by migration. Nevertheless, the immigration to Europe on mass scale is a recent and unprecedented phenomenon with the roots in the guest-worker encouraged immigration of the late 1950s and early 1960s.[1] The available data shows that between 1950 and 1990, the total resident foreign-born population in the EU-15, taken together with Switzerland and Liechtenstein, grew more than fourfold from 3.8 million (1.7% of the total population) to 16 million (4.5%).[2] In 2005 the estimated number of foreign-born population in the countries of the EU-25 already reached 40 million and by the end of 2009, the EU-27 this number rose to 47 million (9.4% out of the Union’s 499 million).[3] This sharp rise in just several decades can be explained when we look at the number of immigrants entering the EU every year. Between 2005 and 2009, it was in average 1.6 to 2 million non-EU immigrants every year, [4] accounting approximately for 80% of the overall population growth of the whole EU.[5] Thus only 20% of the population increase in the EU-27 could be attributed to natural change (live birth minus live deaths).[6] This follows a longer trend, where immigration to the EU-27 is more significant than the natural change since 1992.[7] It is therefore little wonder that a large proportion of live births in the EU has to be attributed to immigration. The countries that lead the statistics of the recorded live births are all among the largest immigrant destinations in the EU-27: Spain, the UK, France and the Netherlands, and in the future (but also today) especially Ireland, Cyprus and Luxembourg.[8] In overall terms, however, fertility rates are for all EU-27 countries around 1.4 children per woman, that is, far below the natural replacement level (2.1).[9] Put in the context, this means that ‘a generation of one hundred women would give birth in the next generation to 66 daughters, who in turn would give birth, in the third generation, to only 44’.[10] This is clearly untenable in the long term. Furthermore, at the same time life expectancy gradually rises and with it also the proportion of elderly people in the European Union’s societies.[11] Even with expected positive net migration based on the EU’s planned migration policies, Eurostat projects that the proportion of people aged 65 and over in the EU-27 will reach 30% in 2060, that is, it will significantly rise from 17.1% in 2008. This means, ‘in other words, there would be only two persons of working age for every person aged 65 or more in 2060’.[12] This data seems to confirm the EU’s prognosis discussed below, which states that without significant number of (preferably high-skilled) immigration, the EU will in the next 20 to 30 years experience large economic downturn and will not be able to maintain its way of life, with expected standards of social welfare provisions, healthcare and pensions.

These numbers are reflected in Eurobarometer surveys, where immigration is consistently present as one of the top concerns of European citizens. The reports show that between spring 2005 and autumn 2009, immigration was in average the 6th-7th top political concern of European citizens, consistently ranking above such key political dimensions as taxation, education, housing, terrorism, energy, or security and defence.[13]

It is also important to think briefly about the causes of this high level of European immigration. Most theorists argue that the cause of the contemporary mass immigration is first and foremost economical.[14] In this vein, the French thinker Alain de Benoist links the appearance of mass immigration with the period of the expansion of global capitalism.[15] This would mean that even forced migration, such as that of refugee and asylum seekers, can be largely explained as the product of globalisation as the growth of cross-border flows of capital, trade, and labour. Since the globalised and globalising world is not a level playing field, growing social and economic divides between South and North and West and East would not account only for direct, economic migration, but also for the flows of refugee and asylum seekers, or indeed even for family reunions that often follow the ‘first waves’ economic immigration. In consequence, the distinction between economic and forced migration becomes blurred. This is the focus of the analytical work of Stephen Castles, who observes that

[f]ailed economies generally also mean weak states, predatory ruling cliques and human rights abuse. This leads to the notion of the ‘asylum-migration nexus’: many migrants and asylum seekers have multiple reasons for mobility and it is impossible to completely separate economic and human rights motivations.[16]

As these authors strongly argue, emigration from developing countries is not a free choice of migrants, but a necessity for the preservation of life by escaping poor and unstable parts of the world, or for securing at least some financial resources for a decent life. The Cold War bipolarisation of the world into two warring camps produced a number of local proxy wars, which often escalated into ethnic conflicts, and did not allow developing countries in the South to built politically stable state infrastructures.[17] This, in consequence, perpetuated poverty and instability. The overall picture that arises is that of a global division between the North-West, with highly developed industries and technology, low demographical levels, strong social protection and high wages, and the South-East, with its high political instability, strong demographic expansion and lowly developed economic structures. Thus, even though Amelie Constant and Klaus Zimmermann in their analysis of the immigration to Germany in 2004 conclude that the largest channel of immigration is family reunion, then refugee and asylum seekers, and only then economic migrants, we would argue, based on the above mentioned grounds, that at the bottom, all these channels are connected by social and economic inequalities between different parts of the world.[18] This slight theoretical digression from our main analysis should serve our reader as a reminder that although we will dispute the economic benefits of mass immigration to Europe, we are not claiming that the EU should not continue its policies for providing shelter for refugee and asylum-seekers. Nevertheless, this is a political decision made on entirely other than economic grounds, where we acknowledge this as our human duty. In the long term, however, such help for immigrants is meaningless, just as any effort to regulate all forms of mass immigration, if, as Klaus Bade reminds us, we do not fight its causes by ‘means of sustainable development policies in the regions of origin …. [and by] means of well-directed, specific and, above all, controlled financial support’.[19] Supporting mass immigration could then only perpetuate economic inequalities in the world since, as many argued, brain drain ‘intensifies a world of flux, divided families, splintered communities, cultural alienation and ethnic resentments – a world where those who can, live in the west, while those who cannot live in the rest’.[20]

The Policies of the EU on Mass Immigration

Based on similar statistical data, institutions of the EU, European governments, and commentators have convincingly argued that Europe will have to rely on immigrants in order to maintain its economic growth and maintain presence on highly competitive international markets.[21] The official position of the EU institutions developed in 2007 is that Europe requires labour force of non-EU immigrants due to two (connected) main reasons: ‘ageing European societies and of growing market needs’.[22] This conclusion is a result of much longer discussions and efforts to make appropriate common institutional arrangements,[23] which were summarised in the 2005 ‘Green Paper on an EU Approach to Managing Economic Migration’ of the Commission.[24] This document urges the EU to rationalise its admission procedures of non-EU nationals, developing common framework and criteria for admission, and also warns that other key world political actors are already competing to attract migrants to meet the needs of their economies.[25]

The immigrants that are to be especially targeted are highly-skilled persons, capable of filling in well-paid jobs or creating their own small businesses. This is a common state policy in the global competition for talents.[26] The high-skilled workers are attractive for host countries due to their ability to contribute to the wealth of the destination countries by higher spending on consumption and housing and the perception that they can be easily integrated into host societies thanks to their higher education.[27] On the other hand, as Robert Rowthorn notes, in case they do not stay only temporarily, unskilled or lower-skilled immigrants ‘are likely to impose a net cost on native taxpayers if they settle in the receiving country’.[28] Bearing these reports in mind, the EU officials thus developed its new EU Blue Card system. This immigration policy aims to provide a special residence and work permit targeted at highly qualified labour force.[29] It was approved by a directive of the Council of the European Union in May 2009 and is expected to enter into force by 2011.[30] The Council directive determines common criteria to be set by EU member states for the applicants. The permit itself will be issued up to the period of four years and will also grant the applicant extensive socio-economic rights. As such, the EU Blue Card is a conscious reaction to the fact that traditionally, the EU has not employed many foreigners in export-oriented innovative industries that require highly qualified labour force.[31] Rather, the EU predominantly attracted those immigrants, who could provide only low or no qualifications, and who gained their employment in competitive import industries.[32] When we once again look at projections for the future, analysts agree that Europe’s migration policies would attract growing numbers of highly-skilled immigrants; however, low- and unskilled immigration would continue at the same time as well.[33] Indeed, it is expected that the most numerous group among these will be precisely those immigrants who are young and low-skilled, from less developed regions of Asia and Africa.[34]

Analysis of the Arguments Supporting Mass Immigration on Economic Grounds

But the question we have to answer is whether these measures will truly address Europe’s declining birth rates and maintain or improve its economy. Based on the available data we conclude that overall net economic gain is very low or none. Furthermore, reasons for assuming that only immigration could tackle the issue of ageing population are mistaken; we argue that there are political decisions to be made that need to address these challenges domestically. This is mainly due to the fact that the EU will be unable to simply single out high-skilled migrants from the rest. As we argued above, mass immigration is mainly fuelled by global economic inequalities and as long as these causes remain unaddressed, it will be mainly migration of refugees and asylum seekers that will continue, together with those unskilled migrants who go to Europe to provide for most basic financial needs. The ‘Fortress Europe’ policies supported by some are in the long range untenable, both on moral, practical, and economical grounds.

In criticising the arguments for the benefits of mass immigration to the EU, we base our argument on the one presented in Britain by the House of Lords 2008 Committee on the Economic Impact of Immigration, which concluded that ‘we have found no evidence for the argument, made by the Government, business and many others, that net immigration—immigration minus emigration—generates significant economic benefits for the existing UK population’.[35]

The first theory of the EU, that mass immigration tackles the issue of ‘pension time bomb,’ is misleading for several reasons. First, the argument ignores the fact immigrants grow old as well and will in time require the same social welfare, healthcare and pensions as the rest of the European population. Therefore there must be other ways how to deal with the challenge of ageing in a longer term. The most important of these solutions would be to extend the length of the active life by increasing the retirement age (much shorter in Europe than in the US or Japan).[36] There are other further measures that should be considered as well. It is above all an option to provide support for young families, which should be extended to housing and financially encourage large families with 3 or more children.

In more general terms, the maximum effort should be directed to increase the employment rates. As Robert Rowthorn observers, in the EU-27 is a large surplus of under-utilised labour, where ‘only 64% of the EU population between 15 and 64 is now in gainful employment’.[37] This shows a large labour gap that could be filled in, since countries like Iceland show employment figures on the level of 84%. Rowthorn reports that emulating the example of Iceland would bring the EU over 50 million jobs – increasing the number of employed workers by third, thus fully providing for the needs of ageing population.[38] What is most striking at Rowthorn’s analysis is that it shows that projected immigration – even as high as 50 or 80 million by 2050 – would not significantly lower the dependency ratio (showing how many non-employed persons an employed person must support), whereas the improvements with the provision of jobs do.[39] As the second step should then follow the rationalisation of the availability of higher education courses with the needs of European labour.[40] This is crucial, as it points to another factor often ignored by proponents of economic benefits of mass immigration. It was best put by the 1997 US National Academy of Science’s report on migration, which is worth quoting at some length. It clearly states that

in the long run, assuming constant returns to scale, immigrants can affect rates of economic growth only to the extent that they differ from the native-born—if, for example, they arrive with a different mix of skills from those of native-born workers. To have an effect on growth rates, this difference between immigrants and natives must persist over each new generation. If the children of immigrants—or, if not the children, the grandchildren and great-grandchildren—come to be just like the native-born, then all that immigration does is augment the population and the scale of the economy; it does not change the rate of growth of income per capita.[41]

In other words, the argument claiming that immigrants fill in gaps on the labour market does not mention that the same can be achieved by well targeted policies that would regulate the higher education courses in accordance with the demands of the market. If the intake of high-skilled immigrants is not accompanied by above mentioned education policies, immigration does not solve anything. And in turn, when such policies are in place, there is no need for mass immigration. The children of immigrants would simply have no advantage to offer when compared to native workers, since they would be brought up in the same environment with untargeted education policies as the rest of the EU citizens.

The second theory of the EU noted above states that mass immigration is beneficial because in general, immigrants will pay more on taxes than they receive from the public expenses. But a number of researches including those reported by the Committee of the British House of Lords agree that this is true only for certain immigrants, that is, for those who are targeted by the EU Blue Card System: highly-skilled and well-paid permanent immigrants, or those immigrants who are planning to establish their own businesses.[42] It can also be true for young and low-income temporary immigrants, who pay on indirect taxes such as VAT, but make little or no claims on the welfare state due to their age and shortness of their stay.[43] Nevertheless, the number of immigrants who bring economic benefits for the European public is balanced out by those low-income and low-educated immigrants, usually with families, who plan to stay indefinitely and heavily rely on the welfare state.[44] As the overall economic impact of immigrant results from the balance of these different types of immigrant, in case of mass immigration that includes a wide spectrum of immigrants with different backgrounds, their respective effects cancel out. Coleman and Rowthorn therefore report that the aggregate impact of large-scale immigration on public finances is only around ± 0.5% of GDP.[45] Furthermore, the immigration of low-skilled immigrants is problematic for one more reason, since as the 2007 report IMF report concluded and as our theoretical analysis on the causes of mass immigration above already suggests, it benefits mainly multinational companies as it increases the share of profits at the expense of wages.[46] It may even lead to the impoverishment of some people by creating unemployment. In this way the 2003 study by Angrist and Kugler concluded that the addition of 100 immigrants eventually leads to the loss of 83 jobs for native workers, with greater effects in those countries that provide their citizens with extensive social welfare.[47]

Finally, it is also questionable whether immigration brings Europe economic benefits from the point of view of longer development of the international market. On the one hand, it is certainly true that the immigration is of the greatest benefit to immigrants themselves.[48] The wages they receive in European countries are much higher than those in their home countries.[49] These remittances consequently help their families back home. Nevertheless, the positive effects of emigration on the source countries are balanced out by the ‘brain drain’ of highly-skilled labour force (which the EU strongly encourages via its Blue Card), which then cannot participate in reinvigorating the economy of its home country. Some theorists therefore conclude that emigration only perpetuates the dependence of developing countries on the global market and more particularly on remittances sent from rich Western countries.[50] In the longer term, perpetuating the underdevelopment of developing countries means the loss of potential economic competitors on the international market.


We have argued that the mass immigration to the European Union cannot be justified solely on economic grounds. Although the European Union targets its Blue Card system to high-skilled immigrants, it also has to cope with those immigrants that are unskilled and low-educated, which will balance out the overall impact on European public expenses to about ± 0.5% of GDP. As we have suggested in the theoretical parts of our text, mass immigration cannot be easily parcelled out between its different types, because its causes are mostly one and the same: economic. The EU therefore cannot hope that in the future, it will be somehow able to separate ‘good’ immigration from the ‘bad’ one, unless it tackles the causes of immigration as such, which would also have to involve preventing the ‘brain drain’ from developing countries it supports via its Blue Card mechanism. With regard to the argument that the EU will increasingly have to rely on immigrants to preserve its population levels, we have argued that immigration in fact does not serve as a cure. Only policies specifically targeted at supporting young families with children can help averting the population decline. Similarly the EU should focus on tackling the low amount of the abled citizens in employment, which could be significantly raised and provide the means for the ageing population without reliance on mass immigration. In consequence, we suggest that when the EU policy makers decide on their stance to immigration, they will have to take other than just economic factors into their account.

Bibliography & Endnotes

Angrist, Joshua D. and Kugler, Adriana D. (2003), ‘Protective or Counter-Productive? Labour market institutions and the effect of immigration on EU natives’, Economic Journal, Vol. 113, No. 488, pp. 302-331.

Arango, Joaquin (2008), ‘Migration: Challenges and Opportunities for the European Union’, in I. Gomes and P. Pereira, eds., Health and Migration in the EU: Better Health for All in an Inclusive Society (Lisbon: National Institute of Health, Ministry of Health, Portugal), pp. 39-43.

Bade, Klaus J. (2004), ‘Legal and illegal immigration into Europe: experiences and challenges’, European Review, Vol. 12, No. 3, pp. 339-375.

Benoist, Alain de, ‘Les Politiques de l’immigration’, in A. de Benoist, ed., L’Immigration autrement, available at Les Amis d’Alain de Benoist, accessed 15 January 2010.

Binford, Leigh (2003), ‘Migrant Remittances and (Under)Development in Mexico’, Critique of Anthropology, Vol. 23, No. 3, pp. 305-336.

Browne, Anthony (2002), Do We Need Mass Migration? (London: The Institute for the Study of Civil Society).

Browne, Anthony (2003), ‘The Folly of Mass Immigration’, openDemocracy, available at

Castles, Stephen (2003), ‘Towards a Sociology of Forced Migration’, Sociology, Vol. 37, pp. 13-34.

Commission of the European Communities (2005), Green Paper on an EU Approach to Managing Economic Migration (11 January).

Commission of the European Communities (2007), Towards a Common Immigration Policy: Communication from the Commission to the European Parliament, The Council, the European Economic and Social Committee and the Committee of the Regions (5 December).

Coleman, D. and Rowthorn, Robert (2004), ‘The Economic Effects of Immigration Into the United Kingdom’, Population and Development Review, Vol. 30, No. 4, pp. 579-624.

Constant, Amelie and Zimmermann, Klaus F. (2005), ‘Immigrant Performance and Selective Immigration Policy: A European Perspective’, National Institute Economic Review, Vol. 194, pp. 94-105.

Coppel, Jonathan; Dumont, Jean-Christophe and Visco, Ignazio (2001), ‘Trends in Immigration and Economic Consequences’, OECD Economics Department Working Papers, No. 284.

Council of the European Union (2009), Council adopts the “EU Blue Card”: more advantages for high-skilled foreign workers (25 May).

Eurobarometer (2005-2009), Surveys 63-72, Available at

European Parliament (2007), European Parliament resolution of 26 September 2007 on the policy plan on legal migration (26 September).

Eurostat (2008), Population Projections 2008-2060: From 2015, Deaths Projected to Outnumber Births in the EU27.

Florida, R. (2002), The Rise of the Creative Class and How It’s Transforming Work, Leisure, Community and Everyday Life (New York: Basic Book).

Freeman, Richard B. (2006), ‘People Flows in Globalization’, Journal of Economic Perspectives, Vol. 20, No. 2, pp. 145-170.

Hall, Ben (2000), ‘Immigration in the European Union: Problem or Solution?’, OECD Observer, No. 221-222. Available at

Herm, Anne (2008), ‘Population and Social Conditions’, Eurostat: Statistics in Focus, No. 98.

House of Lords, European Union Committee (2005), Economic Migration to the EU: Report with Evidence (London: The Stationary Office).

House of Lords, Select Committee on Economic Affairs (2008), The Economic Impact of Immigration: Volume I.: Report (London: The Stationary Office).

Kuzvinetsa, Peter Dzvimbo (2003), The International Migration of Skilled Human Capital from Developing Countries (World Bank, HDNED). Available at

Lanzieri, Giampaolo (2008), ‘Population in Europe 2007: first results’, Eurostat: Statistics in Focus, No. 81.

Lavenex, Sandra (2006), ‘Shifting Up and Out: The Foreign Policy of European Immigration Control’, West European Politics, Vol. 29, No. 2, pp. 329-350.

National Intelligence Council (2008), Global Trends 2025: A Transformed World, available at

Papademetriou, Demetrios G. and Maniatis, Gregory A. (2007), Gaining from Migration: Towards a New Mobility System (Migration Policy Institute for OECD).

Pethe, H. (2007), ‘International Migration of the Highly Skilled Revisited’, Social Geography Discussions, Vol. 3, pp. 211-236.

Rowthorn, Robert (2008), ‘The Fiscal Impact of Immigration on the Advanced Economies’, Oxford Review of Economic Policy, Vol. 24, No. 3, pp. 560-580.

Rowthorn, Robert (2009), ‘Winners and Losers of Migration in the European Context: Economic Aspects’, in H. Fassmann et al., eds., Migration and Mobility in Europe: Trends, Patterns and Control (Aldershot: Edward Elgar), pp. 15-30.

Sutcliffe, Bob (2004), ‘World Inequality and Globalization’, Oxford Review of Economic Policy, Vol. 20, No. 1, pp. 15-37.

United Nations, Department of Economic and Social Affairs (2009), International Migration 2009. Available at

Zimmerman, Klaus F. (1995), ‘Tackling the European Migration Problem’, Tackling the European Migration Problem, Vol. 9, No. 2, pp. 45-62.

[1] Hall (2000), Zimmerman (1995), pp. 46-47. Europe, however, while not experiencing mass immigration on this scale before, underwent in the past series of mass emigrations: Freeman (2006), pp. 147-48.

[2] Bade (2004), p. 340. These numbers include immigrants from both European and non-European stock.

[3] United Nations, Department of Economic and Social Affairs (2009). Source: own calculation. This includes both EU and non-EU immigrants.

[4] Herm (2008), pp. 2-3.

[5] Lanzieri (2008), pp. 1, 4.

[6] ibid., p. 1.

[7] ibid.

[8] ibid., p. 2.

[9] ibid., p. 3.

[10] Arango (2008), p. 39.

[11] Lanzieri (2008), p. 3.

[12] Eurostat (2008).

[13] Eurobarometer (2005-2009). Source: own calculation.

[14] For instance Bade (2004). Our theoretical explanation of mass immigration acknowledges its limits. In this way, the most notable exceptions not following our pattern would include the rise of immigration numbers after the fall of communist regimes in 1989-1991, or the policies of traditional privileged migration (e.g., from former British and French colonies, or migration of ethnic Germans from Eastern Europe).

[15] Benoist,

[16] Castles (2003), p. 17.

[17] ibid., pp. 17-18.

[18] Constant and Zimmermann (2005), p. 99.

[19] Bade (2004), p. 364.

[20] Browne (2003).

[21] For an overview of the debate see for instance House of Lord, European Union Committee (2005), pp. 11-53.

[22] The Commission of the European Communities (2007). This is also the agreed position of the European Parliament (2007).

[23] They all can be find at the EU’s Europa website:

[24] Commission of the European Communities (2005). For the overview of the communitarisation of immigration in the EU, see Zimmermann (1995), pp. 58-60; and Lavenex (2006).

[25] Constant and Zimmermann (2005), p. 98.

[26] Florida (2002).

[27] Pethe (2007), p. 213.

[28] Rowthorn (2008), p. 560.

[29] The Council of the European Union (2009).

[30] The Council of the European Union (2009).

[31] Zimmerman (1995), p. 60.

[32] Zimmerman (1995), p. 60.

[33] Papademetriou and Maniatis (2007), p. 12.

[34] National Intelligence Council (2008), p. 23.

[35] House of Lords, Select Committee on Economic Affairs (2008), p. 5.

[36] Arango (2008), p. 39.

[37] Rowthorn (2009), p. 19.

[38] ibid., pp. 19-21.

[39] ibid.

[40] Arango (2008), p. 39.

[41] Quoted in Browne (2002), p. 76.

[42] House of Lords, Select Committee on Economic Affairs (2008), pp. 23-25.

[43] Rowthorn (2009), p. 16.

[44] ibid.

[45] Coleman and Rowthorn (2004), Rowthorn (2009), p. 16.

[46] Rowthorn (2009), p. 16.

[47] Angrist and Kugler (2003), Rowthorn (2009), p. 17.

[48] House of Lords, Select Committee on Economic Affairs (2008), pp. 22-23.

[49] Kuzvinetsa (2002), p. 4.

[50] For instance Sutcliffe (2004), or Binford (2003).

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