Immigration to the UK since 2000 has been of substantial net fiscal benefit, with immigrants contributing more than they have received in benefits and transfers. This is true for immigrants from Central and Eastern Europe as well as the rest of the EU.
Professor Christian Dustmann
The research provides an in-depth analysis of the net fiscal contribution of UK immigrants, drawing a distinction between immigrants from the 10 Central and East European EU member states that joined since 2004 (the A10), other European Economic Area (EEA) immigrants and non-EEA immigrants. Its main findings are:
- The positive net fiscal contribution of recent immigrant cohorts (those arriving since 2000) from the A10 countries amounted to almost £5bn, while the net fiscal contributions of recent European immigrants from the rest of the EU totalled £15bn. Recent non-European immigrants’ net contribution was likewise positive, at about £5bn. Over the same period, the net fiscal contribution of native UK born was negative, amounting to almost £617bn.
- Immigrants who arrived since 2000 were 43% less likely than natives to receive state benefits or tax credits. They were also 7% less likely to live in social housing.
- European immigrants who arrived since 2000 are on average better educated than natives (in 2011, 25% of immigrants from A10 countries and 62% of those from EU-15 countries had a university degree, while the comparable share is 24% among natives) and have higher employment rates (81% for A10, 70% for EU-15 and 70% for UK natives in 2011).
- The value of the education of immigrants in the UK labour market who arrived since 2000 and that has been paid for in the immigrants’ origin countries amounts to £6.8bn over the period between 2000 and 2011. By contributing to ‘pure’ public goods (such as defence or basic research), immigrants arriving since 2000 have saved the UK taxpayer an additional £8.5bn over the same period.
- Considering all immigrants who were living in the UK over the years between 1995 and 2011, a period over which the net fiscal contribution of natives was negative (and accumulated to about £591bn), EEA immigrants contributed 10% more than natives (in relative terms), while non-EEA immigrants’ contributions were almost 9% lower.
- Over the same period from 1995 to 2011, immigrants who lived in the UK endowed the UK labour market with human capital that would have cost about £49bn if it were produced through the UK education system, and contributed about £82bn to fixed or ‘pure’ public goods.