Analysing the costs and benefits of immigration. Photo: Getty
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Yes, EU immigrants do have a positive impact on public finances

The academics behind a study that shows EU migrants make a net contribution to our economy on the positive impact of recent immigrants.

The impact of immigration on Britain’s tax and welfare system is perhaps the most important economic issue in the debate over the country’s relationship with the EU and its principle of free movement. There are claims that immigrants from Europe take advantage of the UK’s benefit and health system. This has led to political pressure to limit immigrants' access to benefits and public services and even restrict immigration from the European Economic Area countries.

But, despite the controversy surrounding this issue, evidence for how much immigrants take out of and contribute to the public purse in Britain is surprisingly sparse. Our new research published by the Royal Economic Society in the Economic Journal aims to fill this void.

Based on the UK Labour Force Survey and a multitude of government sources, we calculate the overall fiscal contribution of native Britons and immigrants. Our findings show that European immigrants to the UK have paid more in taxes than they received in benefits, helping to relieve the fiscal burden on UK-born workers and contributing to the financing of public services.

To do this, we assign individuals their share of cost for each item of government expenditure. We then identify their contribution to each source of government revenue. We distinguish between immigrants from the European Economic Area (EEA), and those from outside Europe. Additionally, we break down the EEA group into immigrants from the Eastern and Central European countries that joined the EU since 2004 (known as A10 countries), and immigrants from the rest of EEA.
 

Positive net contribution

Our findings show that immigrants to the UK who arrived since 2000, and for whom we observe their entire migration history, have made consistently positive fiscal contributions regardless of their area of origin. Between 2001 and 2011 recent immigrants from the A10 countries contributed to the fiscal system about 12 per cent more than they took out, with a net fiscal contribution of about £5bn.

At the same time the overall fiscal contributions of recent European immigrants from the rest of the EU totalled £15bn, with fiscal payments about 64 per cent higher than the value of public services they used. Immigrants from outside the EU countries made a net fiscal contribution of about £5.2bn, thus paying into the system about 3 per cent more than they took out.

In contrast, over the same period, native British people made an overall negative fiscal contribution of £616.5bn. The fiscal balance of overall immigration to the UK between 2001 and 2011 amounts therefore to a positive net contribution of about £25bn, over a period in which the UK has run an overall budget deficit.

Our analysis thus suggests that immigrants arriving since the early 2000s from Europe have made a net contribution to Britain’s public finances. This is a reality that contrasts starkly with the view often maintained in public debate that immigrants are a drain on the economy.
 

State benefits

This conclusion is further supported by our evidence on the degree to which immigrants receive tax credits and benefits compared with natives. Recent immigrants are 43 per cent (17 percentage points) less likely to receive state benefits or tax credits. These differences are partly attributable to the fact that immigrants are generally working-age men and coming to the UK to work. However, even when compared with natives of the same age, gender composition and education, recent immigrants are still 39 per cent less likely than natives to receive benefits.

Additionally, our research points at the strong educational background of immigrants. For instance, while the percentage of natives with a degree was 24 per cent in 2011, that of EEA and non-EEA immigrants was 35 per cent and 41 per cent, respectively. Similarly, about one in two British born individuals fall into the “low education” category (defined as those who left full-time education before 17), while only 21 per cent of EEA immigrants and 23 per cent of non-EEA immigrants do so.

Most immigrants arrive in the UK after completing their education abroad, and thus at a point in their lifetime where the discounted net value of their future net fiscal payments is positive. If the UK had to provide each immigrant with the level of education they have acquired in their home country (and use productively in the UK, as natives do), the costs would be substantial.

Our estimates indicate that recent immigrants endowed Britain with productive human capital between 2000 and 2011 that would have cost £6.8bn in spending on education. This aspect is often neglected in the debate about the costs and benefits of immigration.
 

Christian Dustmann is director at the Centre for Research and Analysis on Migration (CReAM) at University College London; Tommaso Frattini is assistant professor of economics at the University of Milan

Christian Dustmann receives funding from European Research Council (ERC). Tommaso Frattini does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.

 

The Conversation

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This is the new front in the battle to control women’s bodies

By defining all of us as “pre-pregnant”, women are afforded all the blame – but none of the control.

For several weeks, YouTube has been reminding me to hurry up and have a baby. In a moment of guilt over all the newspapers I read online for free, I turned off my ad-blocking software and now I can’t play a simple death metal album without having to sit through 30 seconds of sensible women with long, soft hair trying to sell me pregnancy tests. I half expect one of them to tap her watch and remind me that I shouldn’t be wasting my best fertile years writing about socialism on the internet.

My partner, meanwhile, gets shown advertisements for useful software; my male housemate is offered tomato sauce, which forms 90 per cent of his diet. At first, I wondered if the gods of Google knew something I didn’t. But I suspect that the algorithm is less imaginative than I have been giving it credit for – indeed, I suspect that what Google thinks it knows about me is that I’m a woman in my late twenties, so, whatever my other interests might be, I ought to be getting myself knocked up some time soon.

The technology is new but the assumptions are ancient. Women are meant to make babies, regardless of the alternative plans we might have. In the 21st century, governments and world health authorities are similarly unimaginative about women’s lives and choices. The US Centres for Disease Control and Prevention (CDC) recently published guidelines suggesting that any woman who “could get pregnant” should refrain from drinking alcohol. The phrase implies that this includes any woman who menstruates and is not on the Pill – which is, in effect, everyone, as the Pill is not a foolproof method of contraception. So all females capable of conceiving should treat themselves and be treated by the health system as “pre-pregnant” – regardless of whether they plan to get pregnant any time soon, or whether they have sex with men in the first place. Boys will be boys, after all, so women ought to take precautions: think of it as rape insurance.

The medical evidence for moderate drinking as a clear threat to pregnancy is not solidly proven, but the CDC claims that it just wants to provide the best information for women “and their partners”. That’s a chilling little addition. Shouldn’t it be enough for women to decide whether they have that second gin? Are their partners supposed to exercise control over what they do and do not drink? How? By ordering them not to go to the pub? By confiscating their money and keeping tabs on where they go?

This is the logic of domestic abuse. With more than 18,000 women murdered by their intimate partners since 2003, domestic violence is a greater threat to life and health in the US than foetal alcohol poisoning – but that appears not to matter to the CDC.

Most people with a working uterus can get pregnant and some of them don’t self-define as women. But the advice being delivered at the highest levels is clearly aimed at women and that, in itself, tells us a great deal about the reasoning behind this sort of social control. It’s all about controlling women’s bodies before, during and after pregnancy. Almost every ideological facet of our societies is geared towards that end – from product placement and public health advice to explicit laws forcing women to carry pregnancies to term and jailing them if they fail to deliver the healthy babies the state requires of them.

Men’s sexual and reproductive health is never subject to this sort of policing. In South America, where the zika virus is suspected of having caused thousands of birth defects, women are being advised not to “get pregnant”. This is couched in language that gives women all of the blame and none of the control. Just like in the US, reproductive warnings are not aimed at men – even though Brazil, El Salvador and the US are extremely religious countries, so you would think that the number of miraculous virgin births would surely have been noticed.

Men are not being advised to avoid impregnating women, because the idea of a state placing restrictions on men’s sexual behaviour, however violent or reckless, is simply outside the framework of political possibility. It is supposed to be women’s responsibility to control whether they get pregnant – but in Brazil and El Salvador, which are among the countries where zika is most rampant, women often don’t get to make any serious choice in that most intimate of matters. Because of endemic rape and sexual violence, combined with some of the strictest abortion laws in the world, women are routinely forced to give birth against their will.

El Salvador is not the only country that locks up women for having miscarriages. The spread of regressive “personhood” laws across the United States has led to many women being threatened with jail for manslaughter when they miscarry – even as attacks on abortion rights make it harder than ever for American women to choose when and how they become pregnant, especially if they are poor.

Imagine that you have a friend in her early twenties whose partner gave her a helpful list of what she should and should not eat, drink and otherwise insert into various highly personal orifices, just in case she happened to get pregnant. Imagine that this partner backed his suggestions up with the threat of physical force. Imagine that he routinely reminded your friend that her potential to create life was more important than the life she was living, denied her access to medical care and threatened to lock her up if she miscarried. You would be telling your friend to get the hell out of that abusive relationship. You would be calling around the local shelters to find her an emergency refuge. But there is no refuge for a woman when the basic apparatus of power in her country is abusive. When society puts social control above women’s autonomy, there is nowhere for them to escape.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle