Wealthy nations reap huge benefits from immigration, study finds

Wealthy nations have reaped substantial economic benefits from immigration over the past 35 years, with many countries still able to absorb more workers, according to new research. The study, set to be presented at a European Central Bank conference, indicates that increased immigration has significantly boosted growth and productivity.

Political discourse in recent years has seen rising tensions over immigration, with anti-immigrant parties gaining traction in countries like the US, Germany, and Britain. However, the research, which analyzed data from dozens of Organisation for Economic Co-operation and Development (OECD) countries, suggests that the influx of immigrants, many of whom are highly skilled, has positively impacted economies.

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

"Receiving countries’ labour productivity grew significantly during and after periods of higher immigration rates," stated the paper authored by Professor Giovanni Peri of the University of California, Davis. The research indicates that an increase in immigrants equivalent to 1% of a country's population is linked to a 1.2% rise in GDP per worker within five years, and a 1.9% increase over a decade. This finding is particularly relevant for the European Union, which has experienced negative natural population growth since 2015.

The study concluded that immigration may have generated up to one-third of the economic growth per worker in countries such as Spain, Italy, and Britain between 1990 and 2024. In Spain, for example, a 15 percentage point increase in the immigrant share of the adult population could lead to a 28% higher growth in GDP per worker. Similarly, in the UK, immigration accounted for an estimated 19% of GDP per person growth. The research also suggests that the benefits of immigration do not diminish with rising inflows, citing Canada and Australia as examples of countries with large foreign-born populations that have ample room for further integration.

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