Wealthy nations reap huge benefits from immigration, study finds

Wealthy nations have reaped substantial economic advantages from immigration over the past 35 years, and many countries could still accommodate a larger workforce, according to new research. The study, set to be presented at a major European Central Bank conference, suggests that immigration has significantly boosted economic growth and productivity, often driven by highly skilled individuals.

The research analyzed data from numerous developed countries within the Organisation for Economic Co-operation and Development (OECD). It found that labor productivity in receiving countries saw considerable growth during and after periods of increased immigration. The paper, authored by Professor Giovanni Peri of the University of California, Davis, states that "Receiving countries' labour productivity grew significantly during and after periods of higher immigration rates." This growth is often realized through increased investments, contributing to higher GDP per worker.

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Receiving countries' labour productivity grew significantly during and after periods of higher immigration rates.

The number of immigrants in OECD countries has risen substantially, from approximately 25 million in 1990 to about 100 million in 2024. This influx is particularly relevant for the European Union, where the natural population growth has been negative since 2015, a trend that accelerated post-pandemic. The study estimates that immigration may have accounted for as much as one-third of the economic growth per worker in countries such as Spain, Italy, and Britain from 1990 to 2024.

For instance, in Spain, the increase in the immigrant share of the adult population by 15 percentage points between 1990 and 2024 could have led to a 28% rise in GDP per worker. Similarly, in the UK, a 10 percentage point increase in the immigrant population share suggests immigration contributed about 19% to GDP per person growth. The study also notes that countries like Canada and Australia, with large immigrant populations, demonstrate that there is ample room to integrate more workers without negatively impacting productivity or investment.

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The predictive coefficients are often significant, economically large and a significant portion of such growth in GDP per worker is realized through strong growth in investments.