Recent immigration to the UK: New evidence of the fiscal costs and benefits

November 6th, 2013 in Other Sciences / Social Sciences

UK immigrants who arrived since 2000 are less likely to receive benefits and less likely to live in social housing than UK natives. What's more, over the decade from 2001 to 2011, they made a considerable positive net contribution to the UK's fiscal system, and thus helped to relieve the fiscal burden on UK-born workers.

The positive contribution is particularly evident for UK from the European Economic Area (EEA – the European Union plus three small neighbours): they contributed about 34% more in taxes than they received in benefits over the period 2001-11.

These are the central findings of a comprehensive analysis of the fiscal consequences of immigration to the UK, published today by the Centre for Research and Analysis of Migration (CReAM) at University College London.

The research report – written by Professor Christian Dustmann and Dr Tommaso Frattini from CReAM – provides an in-depth analysis of the net fiscal contribution of EEA immigrants in each fiscal year since 1995. Its main findings are that:

The estimated net fiscal contribution of immigrants increases even more if one considers that immigration helps in sharing the cost of fixed public expenditures (which account for over 20% of total public expenditure) among a larger pool of people, thus reducing further the financial burden for UK natives.

The main reasons for the large net fiscal contribution of recent EEA immigrants are their higher average labour market participation (compared with natives) and their lower receipt of welfare benefits.

Professor Christian Dustmann, director of CReAM and co-author of the study, said: "Our research shows that in contrast with most other European countries, the UK attracts highly educated and skilled immigrants from within the EEA as well as from outside.

"What's more, immigrants who arrived since 2000 have made a very sizeable net fiscal contribution and therefore helped to reduce the fiscal burden on UK-born workers.

"Our study also suggests that over the last decade or so, the UK has benefited fiscally from immigrants from EEA countries, who have put in considerably more in taxes and contributions than they received in benefits and transfers.

"Given this evidence, claims about 'benefit tourism' by EEA immigrants seem to be disconnected from reality."

More information: www.cream-migration.org/publ_uploads/CDP_22_13.pdf

Provided by University College London

"Recent immigration to the UK: New evidence of the fiscal costs and benefits." November 6th, 2013. http://phys.org/news/2013-11-immigration-uk-evidence-fiscal-benefits.html