Migration as an economic engine: Positive effects refute fears!

Migration as an economic engine: Positive effects refute fears!

The Center for Liberal Studies has published a policy paper examining the impact of migration on the European and American economies and society. According to the KEFIM study, the overall impact of migration on the economy in Europe and the USA is neutral to positive. These results challenge many common stereotypes that often associate migration with an increase in crime or a strain on the economy. Rather, migrants help fill labor shortages, increase productivity and have an overall positive impact on public finances.

The policy paper highlights that the short-term costs of integration will be offset in the medium term by higher tax revenues and improved employment. The majority of empirical studies show no connection between migration and an increase in crime. In fact, communities with higher numbers of immigrants often have lower rates of violent crime. Data shows that irregular migrants in the United States are less likely to be incarcerated than natives with comparable socioeconomic characteristics.

Demographic challenges and recommendations

Another key finding of the study, which is important in the context of demographic developments in Europe, is the forecast that without migration the European workforce could decline by up to 29% by 2060. This would result in a production loss of up to $47 trillion. In order to meet these challenges, the authors of the paper recommend strengthening legal and organized migration as well as improved integration policies.

Dimitris Kairidis from New Democracy also spoke out, emphasizing that the recruitment of legal migrants is crucial to Greece's prosperity. In the political debate it is also pointed out that the extreme right often exploits migration, while the statistical data clearly shows that migration is a necessity.

The economic effects of immigration

The economic impact of immigration is a controversial topic. While critics fear that migrants will take away jobs and depress wages, supporters argue that immigration is essential for social systems in aging societies. In OECD countries, the proportion of the population born abroad has increased from 7% in 1990 to over 12% in 2019. In Germany and the USA, for example, around 15% of the population is now born abroad. In countries such as Australia and Switzerland this proportion is almost 30%.

Measuring economic impact is challenging because counterfactual outcomes must be estimated. According to economic models, immigration can have both negative short-term effects, such as falling wages and increasing unemployment, as well as long-term positive effects on economic growth. The effect depends heavily on the qualifications of the migrants. High-skilled immigrants can contribute significantly to productivity and innovation, while low-skilled immigrants can put downward pressure on the wages of local low-skilled workers.

Migration balance and integration in Germany

In 2024, almost nine million immigrants lived in Germany, which is evidenced by a positive migration balance of around 430,000 people. The main countries of origin vary, with Ukraine particularly standing out due to the war. In the last two years, over a million war refugees from Ukraine have sought protection in Germany. Despite these challenges, there is still a debate about the integration of migrants.

In order to promote integration, around 360,000 new participants in integration courses were recorded in 2023. A new naturalization law, which has been in force since June 27, 2024, has reduced the minimum period of residence to obtain German citizenship to three to five years. In 2024, around 300,000 people received German citizenship, which is the highest figure this millennium.

The at-risk-of-poverty rate for people with a migrant background is 30 percent, compared to 13 percent for people without a migrant background. However, integration remains a challenge: level of education and employment status are important indicators, and the proportion of unemployed people is higher among people with a migrant background.