How Immigration Laws Affect the Economy

Migrants and refugees seeking safe havens benefit the economies of their host nations within five years of arrival, a study published in Science Advances suggests. The study included an analysis of 30 years of data from 15 countries in Western Europe.

According to the data, the strength and sustainability of the country’s economy improves and unemployment rates decline after a spike in migration.

The conclusions of the study contradict the belief that refugees place a financial strain on the country by draining public resources.

“We have shown that historically it has not been a cost, and that if you do not welcome immigrants, the economy might be worse off,” said Hippolyte d’Albis, an economist at the Paris School of Economics who led the work.

The study included many asylum seekers who fled the war in the former Yugoslavia in the 1990s and, more recently, those who came from Syria. The analysis looked at conditions from 1985 to 2015 in Denmark, Austria, Belgium, Finland, Germany, France, Iceland, Ireland, Italy, the Netherlands, Sweden, Spain, the United Kingdom and Portugal.

To assess the economic well-being of the countries, researchers measured average incomes over the years by dividing by gross domestic product (GDP) by population size. They also calculated fiscal balance, which subtracts the amount of money a nation spent on public program from the money raised from taxes.

According to data models, within two years of a migrant influx, unemployment rates dropped and economic health increased.

Researchers theorize that these effects were due to migrants increasing market demand, paying taxes, adding jobs and providing services. Data from the study shows that the improved economic activity far outweighs government costs of migrants.

Limiting legal immigration can make labor shortages worse. In the U.S., for example, the number of denials of H-1B visas increased by 41% in the last three months of 2017 compared to the previous three months. Businesses have complained that the increased denials and red tape have worsened labor shortages. As more baby boomers retire, those shortages may expand further.

Immigration law changes have also impacted education, as colleges continue to lose international students. International students contribute $39 billion to the U.S. economy and make up about 5.5% of enrollment nationally.

The economic impact of losing these international students is felt by local communities as well as the universities themselves.

In the U.S., it has become increasingly difficult for students to get visas. Universities are seeing an increase in visa denials.