Migrants seen boosting and hurting economies – it depends where

Migrants seen boosting and hurting economies – it depends where

Two institutional forecasters came up with different projections on Thursday for what the economic impact of hundreds of thousands of migrants and refugees will be on Europe's economy.

A boost to output and improved public finances, the European Commission suggested in its latest economic forecasts. Already a toll, the European Bank for Reconstruction and Development (EBRD) concluded in a similar offering.

The contradiction is not as stark as it may seem. Both groups were looking at different types of countries on the migrant route.

The Commission was studying countries likely to receive the migrants as workers; the EBRD at countries through which the migrants flow – or outside Europe, where they wait to move on.

The Commission said that gross domestic product for the 28-nation European Union could be lifted by more than a quarter of a percent in 2017 if the migrants were skilled and around 0.18 percent if not.

The EBRD, however, cut its growth projections for Croatia, Hungary, Slovenia and Greece – transit countries for the huge migrant flow from Syria, Iraq and Afghanistan.

It also pointed to a heavy economic hit on non-EU Turkey, which hosts many of the refugees for Syria who either stay or move on to Europe.

Not all the downgrading was due to migration, but these latter countries bear the costs of refugee camps, security and transport without getting the benefit of new workers. Some are looking for EU aid as a result.


For the recipient countries, however, the arrival of a new wave of workers can be a boon, at least according to research by both University College London and the Paris-based Organisation for Economic Co-operation and Development (OECD) think tank.

A paper by the former in 2014 found that European immigrants to Britain contributed more than 20 billion pounds ($30.57 billion) to UK public finances between 2001 and 2011.

It also calculated that what it called "productive human capital" had been added that otherwise would have cost Britain 6.8 billion points in spending on education

The OECD's report was broader. It suggested, also in 2014, that immigrants make important contributions to the labor market, and give more in both taxes and social contributions than they receive in individual benefits.

But it also said that while immigration may lift an economy overall, it does not necessarily do so in a way that makes everyone richer.

"There is little doubt that where migration expands the workforce, aggregate GDP can be expected to grow," it said. "However, the situation is less clear when it comes to per capita GDP growth."

Because of the timing, neither study could look at Europe's current migrant situation. More than 760,000 people have already crossed the Mediterranean heading for the EU and the United Nations said on Thursday it expected around 5,000 a day would cross from Turkey over winter.


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