## Migrants Bring Economic Benefits for Advanced Economies

_IMF Blog, October 24, 2016_

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## Bibliographic details
- Authors: Florence Jaumotte, Ksenia Koloskova, Sweta Saxena
- Published: October 24, 2016

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### Population and demographics
- Authors: Florence Jaumotte, Ksenia Koloskova, Sweta Saxena
- Date: October 24, 2016
- Key facts about migrant populations:
  - Migrants constitute 15 to 20 percent of the working-age population in many advanced economies, and around 30 percent in some Anglo-Saxon countries such as Australia and New Zealand.
  - Between 1990 and 2015, immigrants accounted for half of the growth in working age population of advanced economies.
  - The stock of low-skilled migrants has been the largest (and broadly constant in percent of adult population over time), while the share of high-skilled has been on the rise.
  - Anglo-Saxon countries tend to have a higher proportion of high-skilled migrants than continental European and Nordic countries.
  - Migrants on average tend to be younger than their adopted country’s native-born population, increasing the share of working age population.

### Migration can be a boon — findings on income and productivity
- Overall impact:
  - A 1 percentage point increase in the share of migrants in the adult population increases GDP per person in advanced economies by up to 2 percent in the longer term.
  - This increase comes primarily from an increase in labor productivity, instead of an increase in the workforce-to-population ratio.
- How migrants raise productivity:
  - Both high- and low-skilled migrants improve productivity; gains are not exclusive to high-skilled workers.
  - Low-skilled migrants:
    - Fill essential occupations for which the native-born population is in short supply, contributing to a more efficient functioning of the economy.
    - Take up more manual routine tasks, enabling the native-born population to move to more complex occupations that require language and communication skills.
    - Provide housekeeping and childcare services (the “nanny effect”), allowing native-born women to return to work, or work longer hours. Wherever more low-skilled migrants are present, more high-skilled females participate in the labor force.
- Distributional effects:
  - An increase in the migrant share benefits the average income per person of both the bottom 90 percent and the top 10 percent of earners.
  - High-skilled migration benefits more the average income of top earners.
  - The presence of migrants does not seem to increase inequality within the bottom 90 percent of earners.

### There is more work to do — integration and policy implications
- Central message:
  - Immigration can bring substantial benefits to advanced economies in terms of higher per capita GDP and standards of living, and these gains are broadly shared. The key is addressing short-term challenges and ensuring migrants are integrated into the labor market.
- Policy measures to integrate migrants:
  - Language training.
  - Job search support.
  - Better recognition of the education and work experience of migrants.
  - Lower barriers to entrepreneurship.
- Fiscal and social considerations:
  - Integrating migrants can add to fiscal cost pressures in the short run, but these policies allow migrants to obtain and keep a job at a relevant skill level, and increasingly contribute to the fiscal accounts.
  - Native workers require help to adjust, including by upgrading their skills.
  - Policymakers need to avoid possible overburdening of public services such as health care and education to contain possible buildup of social tensions.

*Migrants Bring Economic Benefits for Advanced Economies — Florence Jaumotte, Ksenia Koloskova, Sweta Saxena; October 24, 2016.*

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## Content in this bundle

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## References

- [https://www.imf.org/wp-content/uploads/2016/10/weo-ch4-spillmigr-chart1.jpg](https://www.imf.org/wp-content/uploads/2016/10/weo-ch4-spillmigr-chart1.jpg)
- [https://www.imf.org/wp-content/uploads/2016/10/weo-ch4-spillmigr-chart2.jpg](https://www.imf.org/wp-content/uploads/2016/10/weo-ch4-spillmigr-chart2.jpg)
- [video](http://www.imf.org/external/mmedia/view.aspx?vid=5138888741001)

_Source: https://www.imf.org/en/blogs/articles/2016/10/24/migrants-bring-economic-benefits-for-advanced-economies_