Do you remember the furore earlier this year over the economic impact of immigration? At the time Sir Andrew Green from Immigration Watch argued that immigration has little impact on GDP per capita in the UK.
Sir Andrew, who seemed to present himself as the voice of economic reason, said: “The much vaunted contribution of immigrants to the economy is very slight indeed#133;of course many immigrants make a useful contribution to the economy but taken in total the economic benefit is at best marginal. The main beneficiaries are the immigrants themselves who are able to send home about £10m a day, not the host nation.”
Don’t be surprised if the debate makes the news again this weekend. According to the National Institute of Economic and Social Research (NIESR), the UK and Ireland - the two countries that have seen the biggest influx of immigration in recent years - are both seeing strong economic gains as a result.
As for the future, NIESR reckons: “EU enlargement will serve to boost GDP per capita by a third of a percent in Ireland and by 0.2 per cent in the UK in the medium term, because the migrant population is predominantly of working age, resulting in more workers per person outside the labour force.” It also says: “Aggregate GDP will be 1.7 per cent higher in Ireland and 2/3 per cent higher in the UK in the medium term, as a result of immigration from EU enlargement.”
NIESR added: “Ireland and the UK have become popular destination countries for NMS workers, partly because of the liberal immigration policies adopted, and restrictive policies adopted elsewhere. Ireland in particular has experienced a large change in the number of NMS nationals present, measuring around 2.2 per cent of the working age population. The equivalent number for the UK is 0.7 per cent. In comparison, the Scandinavian countries that adopted reasonably liberal immigration policies towards NMS workers have seen significantly smaller changes in immigration, which may reflect language barriers.”
There are other advantages to immigration too. If Sir Andrew is right and many immigrants send money home, which boosts their economy of origin, this can be a good thing. It’s good if economies such as Poland grow, and eventually become potential consumers of British goods and services.
But while the NIESR data may lead to a resurgence of press on the subject, we somehow think it’s more likely the report will be ignored. The press tends to only jump when economists say immigration is bad for GDP.
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