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INTRODUCTION:
Each year millions of women and men leave their homes and cross national borders in search of greater
security for themselves and their families. “Throughout human history, migration has been a courageous
expression of the individual‟s will to overcome adversity and to live a better life” (UN, 2006,). Many
migrants are motivated by the quest for higher wages and better opportunities, responding to the demand for
their skills abroad, but many others are forced to migrate because of famine, natural disasters, violent
conflict, persecution or simply a lack of decent work in their home country.
The Global Commission on International Migration (GCIM) describes the driving forces in international
migration in terms of “3Ds”: Development, Demography and Democracy (GCIM, 2005). Widening
disparities in income, wealth, human rights and security across countries serve as push factors towards
migration. Migration in search of work has increasingly become a livelihood strategy for both women and
men because of the lack of opportunities for full employment and decent work in many developing
countries. At the same time, the proliferation of skill-intensive economic sectors, increased demand for
skilled workers, reluctance of local workers to accept certain low-skilled jobs, and demographic trends such
as population decline and population ageing in major destination countries act as strong pull factors. A
growing number of nations are involved with migration as countries of origin, destination or transit, or all
three.
The majority of migrants move in search of employment, taking their families with them; it is estimated that
there will be 214 million international migrants in the world in 2010 (UNPD, 2009). Almost half of
international migrants are women; most of them are now migrating on their own, rather than primarily as family members of other migrants. The International Labour Office estimates that economically active
migrants will number some 105.4 million in 2010; these and family members accompanying them will
account for almost 90 per cent of total international migrants. Only about 7–8 per cent of migrants are
refugees or asylum-seekers, and some of these persons are employed. The International Labour Organization
(ILO) approaches migration from a labour market and decent work perspective within the overarching
framework of its Decent Work for All agenda (ILO, 2007a). While international migration can be a positive
experience for migrant workers, many suffer poor working and living conditions, including low wages,
unsafe working environments, a virtual absence of social protection, denial of freedom of association and
workers‟ rights, discrimination and xenophobia. Migrant integration policies in many destination countries
leave much to be desired. Despite a demonstrated demand for workers, numerous immigration barriers
persist in destination countries. As a result, an increasing proportion of migrants are now migrating through
irregular channels, which has understandably been a cause of concern for the international community. As
large numbers of workers – particularly young people – migrate to more developed countries where legal
avenues for immigration are limited, many fall prey to criminal syndicates of smugglers and traffickers in
human beings, leading to gross violations of human rights. Despite international standards to protect
migrants, their rights as workers are too often undermined, especially if their status is irregular.
The ILO, as the UN specialized agency on labour issues, has been dealing with labour migration since its
foundation in 1919. It is the only UN agency with a constitutional mandate for the “protection of the
interests of workers when employed in countries other than their own”. Since the 1930s, it has pioneered
international Conventions to protect migrant workers and guide migration policy. The 1944 Declaration of
Philadelphia (incorporated into the ILO Constitution in 1946) confirmed the constitutional mandate of the
ILO on labour migration. The 1998 Declaration on Fundamental Principles and Rights at Work reaffirmed
the ILO‟s mandate on labour migration and migrant workers. International labour migration is a
multidisciplinary issue that cuts across all major sectors of the ILO‟s work: labour standards, employment,
social protection and social dialogue.
The ILO is unique in being a tripartite organization consisting of the three main partners – governments,
employers and workers – with major stakes in employment issues, including labour migration. Governments
administer migration and admission policies, employers hire migrant workers, and trade unions are
concerned with the working conditions and welfare of both native and foreign workers. The ILO‟s mandate
across the entire gamut of labour issues, its focus on vulnerable workers (including migrant workers), its
unique tripartite constituency, its long-standing experience in promoting social justice in the world of work,
and its competence in standard-setting confer on it – indeed, oblige it to play – a unique role in developing principles and guidelines for governments, social partners, and other stakeholders in international labour
migration policy and practice.
1.2 OBJECTIVES OF THE STUDY:
1) To study deeply about the International Labour Migration.
2) To study about the economic consequences of the International Labour Migration.
3) To study the impacts of International Labour Migration on origin countries and destination countries.
1.3 SCOPE OF THE STUDY:
Today‟s world is moving towards the globalisation, which result in the migration of the labour
internationally. So, the influx from developing nations is flowing to developed nations. But when
the people move from one country to another there are social, political, economic consequences on
origin country and destination country also. Some are positive impacts and some are negative
impacts. This study will show us the economic consequences of the migration on origin and
destination countries.
1.4 RELEVANCE OF THE STUDY:
The present study is based on the secondary data collection, as it is collected from internet. The
outcome of the study will definitely be useful.
The study has relevance from the point of view of origin and destination country as it will show
clearly what steps to take regarding the migration.
1.5 MIGRATION AND LABOUR MARKET
The rising scale of labour migration over recent years makes the discussion about the economic and social
costs and benefits of migration of labour a highly topical issue among economists and policy-makers. An
increase in the rate of net migration can have significant effects on the labour markets of both receiving
countries and countries of origin and further macroeconomic effects on variables such as economic growth,
unemployment etc. Immigration brings economic benefits for the receiving country as immigrants are
usually more economically active than the local population, are willing to take undesirable jobs, work for
lower wage or under worse working conditions. This might provide a valuable contribution to raising
productivity, entrepreneurship and economic growth. The actual economic effects of immigration depend not only on economic situation in the receiving country and its current needs for labour force but also on the
legal frame of immigration and also cultural and personal characteristics of the immigrants themselves and
their ability and willingness to work and live in the host country and integrate themselves to the majority
society.
1.6 MACRO AND MICROECONOMIC BENEFITS OF LABOUR MIGRATION
Let‟s have a look at macroeconomic benefits of international migration of labour. The influx of foreign
workers into the economy increases the labour supply in the receiving country. Firms have wider options in
the selection process of new employees, they can choose from a wider range of workers available.
Occupations and sectors of the national economy that evince shortages (possibly agriculture, construction,
IT services etc.) attract skilled migrants who contribute to alleviation of these shortages. An increase in
labour supply from migration will also restrain inflationary tendencies of wages or a lead to a decline in
wages as the expanding labour market supply side is easily able to satisfy the needs of firms in terms of
labour demand. Another reason for a reduced pressure on wages is the fact that migrants usually come from
less developed countries and are prepared to accept lower wages than the most of the domestic workers.
Those moderate wage pressures and low price inflationary tendencies in general present a suitable economic
environment for low interest rate policies of the central banks that promote investment and growth. This all
presents positive cost changes for firms in a short term period. But self-evidently not only for firms. As
lower wages result in lower production costs and in effect this may lead to lower retail prices of goods and
services for final consumers.
Possible impacts of migration on social exclusion patterns were dealt by Fevre (1998). He argues that there
are many reasons why freedom of movement is desirable, but one of the most persuasive arguments in its
favour lies in its potential to combat social exclusion by bringing supplies of labour into the places where a
demand for labour exists. But then he adds, that in fact, there is very little empirical evidence that the
dismantling of internal obstacles to migration within the European Union has created the sort of migration
flows which would suggest that free movement is working in this way. Anyway some role of migration in
amelioration in social exclusion patterns is not inconceivable. From a demographic point of view it is
obvious that the migration influx increases the total population which may result in an immediately
increased aggregate demand in the host country. Thus, an increase of population from migration can add to
economic growth in the short run and economic benefits from migration can be still visible also in the longterm
growth. Higher economic growth boosts government tax revenues and allows a smooth implementation
of economic policies, incl. migration policy. The most migrants are younger people that are generally more
flexible and able to adapt to new conditions than older workers that have already their established career and private life that most of them is not willing to endanger. And language skills, that are generally better in the
new generation, also play an important role in the decision for migration. From these reasons, the growing
number of (mainly young) migrants increases the working age population and markets become more
flexible. Admitting of talented, highly skilled migrants (working for instance in finance, IT or research)
contribute to the economic and technological advancement of the receiving country and may create new job
opportunities for natives. Moreover, young people are also less risk feared which may come out in higher
entrepreneurial activity and to present another potential gain for the supply-side of the economy. For some
of young workers the migration may be regarded a temporary episode (e.g. to increase qualification, learn
foreign language, get some experience). When admitting workers that prefer to stay in the long-term we
have to take into account that their extended families join them as well and as to corresponding policies this
may increase the requirements on the system in terms of education, health care, social issues, housing etc.
1.7 THE COSTS OF INTERNATIONAL LABOUR MIGRATION
Growing influx of workers raises a legitimate question about the costs of international migration for a
receiving country. Among many explanations rational reasons mix with more or less substantiated subjective
assumptions rising from concerns of the native population. Critics of labour migration assume that an inflow
of low skilled migrant workers that will increase labour supply in the low skill segment of the labour market
will also (in an excessive extent) cut back the equilibrium wage of local low-skilled workers. Other concerns
are about the risk of higher unemployment among migrants when the qualifications of migrants don‟t match
current demand of firms on the labour market. Low-skilled migrants are also more likely to be unemployed
or economically inactive which may evoke doubts about actual productivity effects. These situations may
produce increased pressures on the welfare state with a higher level of government spending on necessary
infrastructure providing unemployment and other social benefits, bearing increased costs for education,
health care etc.
THE MIGRATION–DEVELOPMENT NEXUS: AN EMERGING CONSENSUS
A number of global initiatives by the ILO and other institutions have identified and explored the positive
links between migration and development in both destination and origin countries. In its conclusions
concerning a fair deal for migrant workers in a global economy, the ILO states: “Promotion of policies that
maximize the contribution of migration to development is another essential component of a comprehensive
policy to address the global context of migration” (ILO, 2004a, para. 17). The ILO Multilateral Framework
on Labour Migration also highlighted this link in its principle 15: “The contribution of labour migration to
employment, economic growth, development and the alleviation of poverty should be recognized and
maximized for the benefit of both origin and destination countries” (ILO, 2006a). One of the six principles
of action listed by the GCIM is “reinforcing [the] economic and developmental impact” of migration. This is
elaborated as follows: “the role that migrants play in promoting development and poverty reduction in
countries of origin, as well as the contribution they make towards the prosperity of destination countries,
should be recognized and reinforced. International migration should become an integral part of national,
regional and global strategies for economic growth, in both the developing and developed world” (GCIM,
2005). The UN High-level Dialogue on International Migration and Development held in 2006 in New York
and the first Global Forum on Migration and Development held in 2007 in Brussels can be considered
further milestones in promoting this issue at the global level. There is a broad consensus that labour
migration issues should be integrated into the mainstream of national employment, labour market, poverty
alleviation and development policies. The second Global Forum on Migration and Development took place
in Manila in October 2008, and the third in Athens in November 2009.
2.1 DEVELOPMENT IMPLICATIONS FOR ORIGIN COUNTRIES
There is a great deal of interest among policy-makers in most developing countries in the development
benefits of migration. Migration can to some extent relieve local unemployment and underemployment
pressures by enabling a considerable number of people to find jobs overseas, while also generating large
flows of remittances. Set against these advantages is the chief drawback of losing some of the brightest
people, creating situations of “brain drain”.
2.1.1 Migrant Remittance Flows
There is an international consensus that migrant remittances are the most tangible benefit of migration to
developing countries. Migrant remittances usually go towards improved housing, nutrition, schooling and
health care. Remittances therefore create human capital by financing education of children and health for all
age groups, and improving food security for poor households. The volume of migrant remittances to developing countries has greatly increased in recent years - from US$60 billion in recorded remittances in
1990 to US$285 billion in 2007 (Ratha and Xu, 2008). Remittances reached US$328 billion in 2008, but
may drop by as much as 10 per cent in 2009 as a result of the global economic crisis. Flows to Latin
America, in particular, have fallen. Despite this decline in the growth of these flows, remittances remain
resilient in relation to other forms of financial transfers - official development assistance (ODA) and foreign
direct investment (FDI). Recorded remittances are now over twice the level of ODA, which in 2007 was
US$105 billion, and about two-thirds that of FDI, which was US$325 billion the same year. For some
countries, in fact, remittances constitute the main source of foreign exchange. The World Bank has therefore
described remittances as “an important and stable source of development finance” (World Bank, 2003, p.
157). Yet it must also be stressed that remittances are private household transfers and should not be viewed
as a substitute for ODA, FDI or investments in public services. This was recognized in the conclusions of
the first GFMD, which emphasized that “Remittances do not diminish the need for ODA and they are not an
alternative to national development efforts by concerned governments” (GFMD, 2007, p. 9). An important
advantage of remittances is that they are better distributed than FDI, which is largely concentrated in a few
developing countries. They are also a more reliable and stable source of income, tending to fluctuate less
with economic cycles and thus to be less volatile than capital flows.
2.1.2 Employment and Wages
While there are many motivations behind individual decisions to migrate, a major force driving
contemporary migration is a lack of decent work opportunities at home. In developing countries, decent jobs
are not being created fast enough to absorb the growing numbers of people ready to join the labour force
every year. Migration can thus be seen as a means to increase economic security. Although emigration may
be perceived as helping to ease population pressures, for most countries it can have only a modest impact at
best. Even for the main countries of origin, the proportion of the population leaving is relatively small. The
largest transfer is from Mexico to the United States. Of the 108 million people alive today who were born in
Mexico, about 8 million now live in the United States, effectively reducing Mexico‟s annual population
growth rate from 1.8 to 1.5 per cent. For most other origin countries, such as China and India, the
proportions are much lower. In very populous countries of origin, even high levels of emigration may have
minimal effects on unemployment and wages (UN, 1998a). However, because migration is selective, it may
induce upward pressure on wages in specific sectors. In Pakistan, for instance, emigration to the Gulf
countries resulted in increased wages for skilled construction workers and possibly also for low-skilled
construction and agricultural workers (UN, 1998a). Similarly, real wages in the Philippines seem to have
risen in line with migration, especially for workers in manufacturing (Lucas, 2005). In India, there are indications that the huge migration from the State of Kerala to the Gulf region has helped raises wages in
that state (Zachariah, Mathews and Irudaya Rajan, 1999). Some countries with high net emigration rates also
have intractable unemployment problems. In small countries with large expatriate populations, the reduction
of unemployment or underemployment related to emigration may be substantial.
2.1.3 Skilled Migration and the “Brain Drain”
In considering the development impact of international migration, it is important to assess the impact of
skilled migration from developing countries. Since the early 1990s the international mobility of highly
skilled workers has been increasing, reflecting globalization trends, rising global demand for skills, selective
admission policies in developed countries, and the phenomenal growth in ICT. The impact of this “brain
drain” from origin countries varies according to the characteristics of those countries (size and level of
development), the type of sector or occupation concerned, the mode of financing education (public or
private) and the type of migration (temporary, permanent or circular) (Docquier and Marfouk, 2005; Kapur
and McHale, 2005; Lowell and Findlay, 2002; OECD, 2002a; World Bank, 2006b). Skilled people move for
many reasons, including higher wages, better facilities and more opportunities for advancement. Destination
countries sometimes promote the immigration of professionals through recruitment drives and selection
systems that facilitate entry. These selection systems can amount to what has been called “cherry picking”,
in the sense of attracting the “best and brightest” from poor countries and depriving these countries of their
most qualified individuals – individuals in whom they have made heavy investments in education and
human capital, often at public expense. Many migrants from developing countries in the United States in
1990 had twice as much education as their compatriots at home (Adams, 2003). This trend has continued for
almost all developing countries since the 1990s. Thus, for example, in 2000 there were 3.7 times more
Jamaicans with a university education in the United States than in Jamaica; and for every ten Salvadorian
university graduates at home, there were four in the United States (Adams, 2003)
Brain drain is a real concern, for it can have dire consequences for sustainable development in developing
countries, especially the least developed. The departure of skilled migrants reduces a country‟s capacity for
long-term economic growth. Countries that lose a significant part of their skilled labour force can suffer
lower returns to capital. Local firms that invest in training people will find it hard to recoup their
investments if these trained workers regularly leave. Because it tends to have cumulative effects, the
emigration of highly trained people may make it very difficult to create the critical mass of know-how
necessary for product development and for adapting imported production technologies to local conditions.
Moreover, the emigration of highly skilled workers trained at public institutions means a loss of return to the
society on its investment in higher education, as well as a loss of potential fiscal revenue. “Highly educated citizens may also help to improve governance, encourage education of children and help train or guide other
workers, all of which may be reduced as a result of high-skilled emigration”.
2.1.4 Transnational (diaspora) Communities
Governments of origin countries are increasingly interested in the potential value of transnational
communities as engines of development. For example, Mexico has created special programmes that match
government funds to remittances that are invested to create jobs in migrant areas of origin (López Espinosa,
2002). Mexicans in the United States have thousands of “hometown associations” which have supported all
kinds of community activities, from building new roads to repainting churches and funding fiestas.
Similarly, migrants from El Salvador who live in Los Angeles, Washington DC, and many other cities in the
United States have established town committees (comités del pueblo) to support activities back home, such
as paving roads and installing electricity (Portes, 1997; Portes, Escobar and Walton Radford, 2005). In
addition to sending remittances to their families as discussed above, overseas migrant communities are now
seen as investors, welfare providers, knowledge communities and technology harbingers to their home
countries (Davan and Tewari, 2001; Kuznetsov, 2006). They perform such services by exchanging
information and contacts, helping to enforce contractual arrangements, reducing reputation barriers, and
promoting investment and skill transfers. Indian nationals who have reached senior executive positions in
multinational companies have encouraged their companies to set up operations in India. Studies undertaken
by migration centres in Côte d‟Ivoire and Ghana have shown that migration and return can act as a
mechanism for providing capital to develop small enterprises, particularly among poorer and less-skilled
migrants (Ammassari, 2003). In China, funds amounting to some US$60 billion are estimated to have been
invested by 55 million overseas Chinese.
2.1.5 Migration and Trade
Because traded goods include labour inputs, trade, like migration, involves the movement of labour. For this
reason, economists look at trade as a substitute for migration. In the EU, expansion of intra-community trade
has brought about a convergence of income levels. Today, even though workers are completely free to move
within the EU, the number tempted to migrate is an insignificant proportion of the European workforce. This
is because trade and other measures have largely accomplished the job of reducing economic differences
between the Member States (see Venables, 1999). The relation between trade and migration is, however,
much more complex than this would suggest. Some economic activities, such as “call centres”, can easily be
relocated to low-wage countries, so that jobs, rather than people, migrate, but other activities cannot be relocated. In some fields, such as financial services and high-technology products, trade and migration are
complementary, in that the former prompts an increase in the latter.
2.1.6 Return Migration and Circular Migration
An OECD study of return migration from its member States sheds some light on when migrants return and
why. According to the study (OECD, 2008), 20–50 per cent of migrants (depending on the destination
country) leave within five years of their arrival, either to return home or to move to a third country
(secondary migration). This proportion varies with the country of destination: some countries, such as
Canada, New Zealand and the United States, are more successful than European countries in retaining
immigrants. Individuals choose to return because of four main reasons: “i) failure to integrate into the host
country, ii) individuals‟ preferences for their home country, iii) achievement of a savings objective, or iv)
the opening of employment opportunities in the home country thanks to experience acquired abroad”
(OECD, 2008, p. 163). Migrants‟ contribution to the development of their home countries depends upon the
combination of resources they transfer before and at the time of their return (OECD, 2008). Thus,
individuals who return because of the latter two reasons are more likely to be in a position to contribute to
the development of the origin country than those who return because of the former two.
2.2 THE IMPACT OF MIGRATION ON DESTINATION COUNTRIES:
Immigration has consequences for destination countries just as profound as those for origin countries. The
contribution of migrant workers to destination countries has generally been less researched, and
consequently is not as well documented as the contribution of migration to origin countries. Thus it is more
difficult to present a thorough discussion of the role of migration in destination countries. There are, of
course, proven benefits of migration to destination countries and societies. Despite this, public discourse
usually centres on the social adjustments that receiving societies have to make to immigrants who have a
different ethnic origin and whose values may differ considerably from their own. Many societies have
managed to adjust to increasing immigration, and some, like Canada, even celebrate diversity. Today there
is much greater cultural diversity in many countries, even in those which as recently as the 1990s did not see
themselves as countries of immigration. There have been some negative reactions, however, which
sometimes take the form of open racism and xenophobia, especially where migration is perceived, rightly or
wrongly, to take away jobs from native workers. At another level, migration, especially when large in scale,
may have important repercussions on the political order in destination countries. Particularly where it does
not lead to integration, it sometimes results in ethnic tensions.
2.2.1 Economic Growth
Migrants contribute to economic growth in numerous ways – by filling labour market needs in high-skill and
low-skill segments of the market, rejuvenating populations, improving labour market efficiency, promoting
entrepreneurship, spurring urban renewal, and injecting dynamism and diversity into destination countries
and societies. The contribution of migrants to the growth and transformation of destination countries has
been amply demonstrated from the historical experience of countries that have experienced substantial
immigration. In general, the countries with the highest levels of immigration are among the most
economically successful – Australia, Canada and the United States. In Europe since the Second World War
immigrant workers have been credited for contributing to 30 or so years of sustained growth. In East and
West Asia since the 1970s, migrant workers have helped transform cities almost overnight into gleaming
metropolises; and they currently form the backbone of the booming construction industry in Dubai and the
United Arab Emirates. In North America, for generations, immigrants to Canada and the United States have
renewed and re-energized the population and economy. Nor is the impact of migration limited to the labour
market; it can provide incentives for capital accumulation as well
2.2.2 Employment
There always seems to be controversy about whether immigration causes higher unemployment among
natives. At the enterprise level there are sometimes displacements when firms restructure and foreign
workers are hired to take the place of native workers, especially those older and less skilled. What is
particularly difficult to assess is whether, in such situations, after taking all economic adjustments into
account, there is higher unemployment among natives than there would have been if immigration had not
taken place. If immigration brings about an expansion of the economy, it is not so clear that it causes higher
unemployment among natives.
2.2.3 Wages and Earnings
There has also been controversy about whether the presence of migrant workers depresses the wages of
native workers. It is assumed that migrant workers compete with native workers, reducing their wages and
worsening income distribution. A recent World Bank study finds mixed results on this. However, other
research does not bear out such assumptions regarding immigration‟s negative impacts on wages. The nearuniform
finding of a wide range of studies is that any negative effect of immigration on wages is small, if it
exists at all. Studies in Hong Kong (China) and Thailand found that increases in immigration had only a
small negative effect on wages. A study of the impact on wages in areas with high concentrations of migrant
workers found that a 10 per cent increase in migrants would reduce the wages of Thais by about 0.2 per cent (UNDP, 2009). Similarly, in Hong Kong (China), a 40 per cent increase in new migrants would lower wages
by only 1 per cent (UNDP, 2009).
In general, the wages of immigrants as a whole are lower than those for native workers, though the United
Kingdom is an exception (Sriskandarajah, Cooley and Reed, 2005). In most EU countries, migrants, and
particularly non-EU migrants, are more likely to be unemployed or underemployed than natives. Although
the situation varies among countries, the general picture indicates that this is the result of lower levels of
education and skill among immigrants. This is the case in the United States as well, where in 1998 the
hourly wage for immigrant men was 23 per cent less than that for native men, largely because of the
increasing concentration of immigrants with low levels of education. Part of the explanation for lower wages
is discrimination against immigrants. Many studies show that visible minorities earn significantly less than
natives, even when taking into account occupation, industry, education, experience and language, among
other factors
2.2.4 Migrant Entrepreneurship
In many countries, migrants are more likely than natives to be entrepreneurial. They are also more likely to
be self-employed. This can provide many benefits to destination societies. “Migrant entrepreneurs broaden
the range of goods and services available, adding vitality to particular city neighbourhoods, thus preventing
or even reversing deterioration. Migrant entrepreneurs often have skills that are no longer in sufficient
supply in host economies and are willing to work long hours and use their social capital to reduce production
and transaction costs” (UN, 2006, p. 49). The OECD found that in most of its member countries selfemployment
among the migrant population had increased between 2002 and 2005, both in numbers and as a
proportion of overall self-employment (OECD, 2007a).
2.2.5 Migrants’ Contributions to Urban Renewal
International migration has played an important role in preventing the depopulation of cities in developed
countries and in reviving businesses and housing markets. Key cities in the traditional immigration countries
of Australia, Canada and the United States provide examples, including Brisbane, Melbourne, Perth and
Sydney in Australia; Toronto and Vancouver in Canada; and Chicago, Houston, Los Angeles, Miami and
New York in the United States. Most of these cities have become “global cities”, as centres of trade,
international finance and corporate or government headquarters (UN, 2006). At the same time, the
experience has been mixed, with some migrant groups being concentrated in segregated, poor suburban
neighbourhoods. Migrants from common origins tend to move into specific locations or gather there as a
result of government housing policies, thereby creating migrant enclaves. The establishment of disadvantaged and segregated migrant communities leads to social exclusion and marginalization and
inhibits integration and social cohesion.
2.2.6 Fiscal Implications
A major concern in destination countries has been that immigrants may become a burden on them by costing
more in public services and welfare payments than they contribute through taxes and social security
contributions. The mass media made a major issue of this fear before the accession of ten Eastern European
countries to the EU in 2004. The fear of being “welfare magnets” caused some countries, including Ireland
and the United Kingdom, to limit the welfare benefits that new immigrants could claim. The actual
experience proved to be contrary to popular expectations. An analysis by the Department of Work and
Pensions in the United Kingdom revealed no discernible statistical evidence that migration from accession
countries had resulted in an increase in the welfare claimant rate since May 2004. Attempts to estimate the
net fiscal costs (if any) of immigration are fraught with difficulties for several reasons, according to the
World Bank (2006b). Results depend to a great extent on what methodology is used, what expenditures and
revenues are included, and whether households or individuals are considered. For example, static
calculations of the current net fiscal impact fail to take into account the age structure of the immigrant
population, while any valid computation will need to factor in the levels of skills, experience, education and
fertility among immigrants. Most calculations, moreover, do not consider the savings in education and
training to the host country when skilled migrants are recruited. The fiscal impact of immigration appears to
depend on the age at which immigrants arrive in the destination country. Those who come at working age
are likely to make a greater contribution to public finances and social security than those who come as
young children.