UK Economy: EU Immigrants Contributed More Than They Took Out in Benefits

A new study has shown that immigrants from 10 countries that joined the European Union over the last decade have contributed more to the UK economy than they have taken out in benefits.

According to the University College London's Centre for Research and Analysis of Migration report, entitled The Fiscal Effects of Immigration to the UK, EU immigrants added £4.96bn (€6.2bn, $7.8bn) more into the UK economy in the years to 2011, than they took out in public services, such as the NHS, education, or welfare.

The net contribution made by EU migrants during the period was £20bn. Migrants from the original 15 EU countries contributed £15bn more in taxes than the benefits they received while people from counties in eastern Europe - who have been at the centre of recent debates about immigration in the UK - contributed £5bn more than they received.

"Although the fiscal contribution of immigrants has emerged as a key issue of concern in the public debate on immigration, very little evidence is yet available that allows assessment of how much immigrants take out of and contribute to the public purse," said the authors of the report, Christian Dustmann and Tommaso Frattini.

"This study attempts to fill this void by suggesting a simple methodology that answers the focal policy questions by identifying the conceptual and methodological difficulties these issues present and offering implementable solutions.

"We then apply this methodology specifically to the UK, a country in which this debate has been particularly fierce over recent years."

If fixed public service costs, which includes the armed forces, were stripped from the calculation, the net benefit amount would be more than double to £10.5bn.

The authors of the report include analysis of migrants' share of all public services costs and weigh it against the amount they contribute.

This provides a net balance showing what benefit EU immigrants contribute to the the UK as well as the bloc as a whole.

The statistics show that the indigenous population cost the state £617bn when allocating a share of the resources to EU immigrants, after weighing up how much they contribute to the economy.

However, without the contribution of EU immigrants to the economy, this rises to £679bn if fixed public service costs were purely pegged to the indigenous population.

"We thus conclude that the recent wave of immigrants, those who have arrived in the UK since 2000 and driven the stark increase in the UK's foreign born population, have contributed far more in taxes than they have received in benefits," said Dustmann and Frattini.

"Moreover, by sharing the cost of fixed public expenditures (which account for more than 14% of
total public expenditure), they have reduced the financial burden of these fixed
public obligations for natives.

"In fact, we estimate considerable implicit savings on these expenditures – just short of £24bn between 2001 and 2011. This figure is even more striking considering that our calculations do not take into account the savings to the UK taxpayers of immigrants arriving with their education paid for by taxpayers in other countries.

"Such savings are themselves substantial: if allocated as an annuity to immigrants according to the education levels of natives in the same occupations, they amount to more than £18bn for recent immigrants in the 2001–11 period."