Migration 

is the movement of people from one permanent home to another. This movement
changes the population of a place. International migration is the movement from one country to
another.
People who leave their country are said to emigrate. People who move into another country are
called immigrants. The movement of people into a country is known as immigration.
Sometimes people have a choice about whether they move, but sometimes they are forced to
move. The reasons people leave a place are called the push factors. The reasons people are
attracted to new places to live are called the pull factors.

Pros of Immigration

1. Increased economic output and living standards. Net immigration will lead to a growth in the
size of the labour force and an increase in the productive capacity of the economy. Immigration
leads to higher economic growth with a corresponding rise in tax revenues and potential for
government spending.

2. Potential entrepreneurs. It is argued that immigrants often arrive with little wealth so have a
greater incentive to try and make something for themselves. Also, people who are willing to leave
a country and try in a foreign company are the most ambitious and willing to take risks and a
result tend to be the more dynamic part of the workforce. Immigrants who are young and mobile
are also quite likely to be entrepreneurs – set up businesses which create innovative products.
The American economy is an example of how immigrants have moved to America and set up
classic American companies – leading to higher living standards and a greater choice of goods and
services. For example, (Apple) Steve Job’s father – Abdul Fattah Jandali was from Syria.
Alexander Graham Bell (telephone AT&T) from Scotland. Jeff Bezos (Amazon) son of a Cuban
immigrant. Sergey Brin (Google) is a Russian immigrant.
Although immigrants made up just 13.7 percent of the U.S. population in 2017, 1 they made up
almost 30 percent of all new entrepreneurs in the United States that year. 2 Immigrants continue
to be nearly twice as likely as native-born people to start businesses

Frequently, we think about immigrant entrepreneurship in connection with tech giants and
startups such as Amazon, Apple, Google, and Yahoo—which were founded by immigrants or their
children—and Microsoft and Oracle, which are today led by immigrants. According to a recent
study by New American Economy, nearly 44 percent of the companies on the 2018 Fortune 500
list were founded by immigrants or the children of immigrants.5 Together, these companies in
fiscal year 2017 brought in $5.5 trillion in revenue—a figure that is greater than the gross
domestic product (GDP) of every country in the world other than the United States and China

But that’s not the whole picture. We know that small businesses make up nearly 70 percent of all
employer firms in the country and that they help to create jobs and power local economies. It is
therefore significant that immigrants own more than 1 in 5 small businesses and are more than
20 percent more likely to own such a business than a native-born person. 7 Beyond the direct
economic benefits of these businesses and the jobs they create, it’s important to talk about
what it means to a community to have a thriving Main Street. Immigrants own more than 60
percent of all gas stations, 58 percent of all dry cleaners, 53 percent of all grocery stores, 45
percent of all nail salons, and 38 percent of all restaurants.8 These are the businesses that
represent the life and vitality of local communities.

3. Increased demand and growth. A fear of immigration is that ‘Immigrants take jobs from
native-born population’ However, this is known as the lump of labour fallacy. The belief that the
number of jobs remains fixed. However, this is not the case, if immigrants move to the US or UK
and gain employment, then they will spend their wages in their new country, creating new demand
in the service and goods sector. Far from ‘taking jobs’ immigrants contribute to a growth in GDP.
Between 1900 and 1915, 15 million immigrants arrived in the US (1), but this was a period of low
unemployment and high economic growth. Immigration was a major factor in the rapid rate of
growth (In US between 1890 to 1910 – economic growth was over 4%.)

4. Better skilled workforce. In the UK, immigrants working in the economy are more likely to
have more educational and skilled qualifications. For example, just 20% of UK citizens finished
education at 21 or later. But 53% of new immigrants were educated until 21 or later. (LSE
study 2012) Immigration allows an economy to attract high skilled professionals to fill in job
vacancies and contribute to higher tax revenues.

5. Net benefit to government revenues. Because immigrants are more likely to be young and
working than native-born citizens, they provide a net benefit to government revenues. Working
people pay income tax, but don’t receive benefits, such as education, pensions. Young people are
less likely to use health care services than old people. For example, the UK government HMRC
show that in 2015/16, EEA nationals paid £15.5bn more in income tax and national insurance than
they took out in tax credits and child benefit (HMRC, 2018). A study by Oxford Economics
(2018) shows that recent migrants from EEA had biggest fiscal benefit (+£4.7bn), non-EEA
migrants a small cost (£ -9.0), and UK born citizens the biggest net tax burden (-£41.0bn).

 Evaluation – The impact of migration does depend on the type of immigrants. In the UK
experience, non-EEA migrants have a bigger fiscal cost, because this includes more old-
aged dependents who can migrate due to family reasons (therefore negative tax impact).
There is a list of different studies on the fiscal impact of immigration here.
6. Deal with an ageing population. Many economies in the west are facing a demographic crunch
with a low birth rate and ageing population causing a rise in the dependency ratio (ratio of old to
young workers). This puts pressure on social care, tax revenues and government spending.
Immigration is the most effective policy to deal with an ageing population, as it allows shortages
in health care and social care to be filled with young workers who make a net contribution to
government finances and boost the workforce.

7. More flexible labour market. Immigrants are highly mobile. They move to economies when
wages are high and demand for labour strong. This helps to prevent a booming economy
overheating by providing labour to meet the growing demand. However, less obvious is the fact,
that if the economy enters a downturn, migration flows often reverse, meaning they don’t stay
to try and get unemployment benefits but return home. A good example is Ireland. In the boom
years, pre-2007, the economy attracted many construction workers from the EU. When the
property market collapsed many construction workers went home – limiting the rise in Irish
unemployment. Immigration helped the labour market be more flexible.

8. Solves a skills shortage. If an economy has a shortage of skilled workers such as nurses and
doctors, it would take several years to train new workers. But, the health service cannot afford
this wait. Immigration enables the shortage to be filled immediately.

9. Filling undesirable job vacancies. Some types of jobs are often difficult to fill by native-born
workers due to low wages and/or the prestige attached to that kind of work. For example,
farmers often rely on immigrant workers to pick crops. A decline in immigration to the UK in
2019, led to farmers claiming they were unable to pick the harvest because they couldn’t get the
seasonal labour. Immigration provides a benefit to business and employers who rely on flexible
labour to fill job vacancies. Also, if low-skilled jobs are filled by migrants, it enables native-born
workers to gain better-skilled work elsewhere.

10. Multi-cultural society. Away from economics, some feel that immigration leads to greater
cultural diversity, which gives a country a more diverse and inclusive feel. All countries with
immigration have absorbed some aspect of foreign culture into their country – be it cuisine,
music, literature or political influences.

11. Immigrants and refugees also are breathing new life into rural communities around the
country that have been experiencing population decline for more than two decades. Late last
year, CAP found that immigrants helped to ameliorate population decline in nearly 4 out of 5
rural places in the country that experienced such losses.10 And in those rural places that
experienced population growth, immigrants were entirely responsible for the growth in more
than 1 in 5 places.11 We know that sustained population loss contributes to hospitals shutting
their doors, schools closing or being consolidated with those in neighboring towns, and businesses
drying up. But in these rural places, immigrants are opening small businesses, providing essential
health care services, rejuvenating downtown areas, and both filling and creating jobs. 12 They are
also contributing their food, music, culture, and language and are increasingly becoming involved
in local government.
Cons of immigration

1. Potential negative impact on real wages. It is argued that low-skilled immigrants put
downward pressure on wages. The argument is that an increase in the supply of unskilled labour
enables firms to fill vacancies with lower wages than previously. Between 2010 and 2018, the UK
had a high rate of net migration, but this was also a period of stagnant real wage growth. The
impact on wages tends to be greater for the low-paid and those with few educational
qualifications. A recent study by the Bank of England found a rise in immigration had a small
impact on overall wages – with a 10% increase in immigration – wages fall by 0.31%. A study
Dustmann et al (2013) find negative effects of immigration for the lower paid; they found that a
1% increase in the ratio of migrants to non-migrants leads to a 0.5% decrease for the poorest
10%.

 The impact on wages is uncertain. There are conflicting studies depending on the type of
immigration. Most recent studies in the UK suggest if there is a negative effect on real
wages it tends to be small. Also, many factors affect wages apart from migration levels.

2. Real GDP per capita could fall. Often supporters of immigration point to how it increases
real GDP, and this is true. A rise in the population will ceteris paribus, increase national output.
But a more useful measure is GDP per head. If immigration is of low-skilled and/or those not in
labour markets, it will lead to a fall in real GDP per head.

3. Structural unemployment. Immigration could lead to some displacement of native-born

workers who then experience structural unemployment. For example, if migrants gain unskilled
labour because they are willing to work for lower wages. Those native-born low-skilled workers
may find it harder to gain new employment in higher-skilled occupations.

4. Pressure on public services. Immigration and a rise in local populations put higher pressure on
social services, such as schools, hospitals, roads and public transport. In theory, higher growth
would lead to more tax revenue to enable higher spending. But, migration tends to be focused in
particular areas (e.g near borders). Local people can feel a deterioration in the quality of public
amenities because the population is growing faster than the number of schools. In the UK, the
pro-Brexit vote was often highest in areas like Lincolnshire and Dover, which had recently
experienced an influx of migrants without any corresponding increase in investment.
  If migration is more evenly spread out, these problems can be avoided. For example,
parts of Scotland suffer from declining populations, but ironically migrants are often
attracted to over-crowded areas like the south and London, where other migrants
already live.

5. Housing costs If migrants move to areas with limited housing stock, migration can put upward
pressure on rents and house prices, reducing living standards and increasing housing poverty for
both migrants and native-born population who experience high living costs. In the UK, housing
costs are a major problem – especially in areas like London and the south where it has been hard
to find places to build new housing. Studies such as the Migration Advisory Committee (2018)
found that a 1% increase in the UK’s population due to migration increased house prices by 1%.
The Ministry of Housing, Communities and Local Government (MHCLG) found that between 1991
and 2015 immigration had contributed to a 20% rise in house prices (Study p.76)

Lack of affordability in UK housing has been exacerbated by immigration.

6. Disharmony from rapid immigration. Whilst some like a more multi-cultural society which
occurs from immigration, others are less welcoming of this change and feel like their culture and
background is threatened by immigrants who don’t fit into their existing society. This is
especially an issue with immigrants who don’t learn the native language, have different religions
and belief systems and live in mostly isolated communities.
  Evaluation: Often dislike of immigration is strongest in communities where the rate of
immigration is very low. Areas with high rates of immigrants are more likely to
appreciate the benefits of immigration.

In addition, there are a number of obstacles that the migrant may need to overcome, including:

 unemployment in new country

 racism and cultural differences
 language barriers
 lack of opportunities

https://stat.gov.pl/metainformacje/slownik-pojec/pojecia-stosowane-w-statystyce-
publicznej/845,pojecie.html#:~:text=Definicja%3A,granicy%20administracyjnej
%20podstawowej%20jednostki%20terytorialnej.

https://www.bls.gov/news.release/forbrn.t01.htm

https://www.bbc.co.uk/bitesize/guides/zkg82hv/revision/5

https://www.americanprogress.org/issues/immigration/reports/2019/06/26/471497/building-
dynamic-economy-benefits-immigration/

https://www.economicshelp.org/blog/152453/economics/pros-and-cons-of-immigration/