European immigrants to the United Kingdom have contributed much more to public finances than they have received in state benefits, a new study by researchers from the University of London’s Centre for Research and Analysis of Migration has established.
Professor Christian Dustmann and Dr. Tommaso Frattini’s findings on the economic impact of European immigration will be published on November 5 in the Economic Journal of the Royal Economic Society.
The authors of the report argue that European immigrants who arrived in the U.K. since 2000 have contributed more than £20 billion to the U.K.’s public finances between 2001-2011. These immigrants also “endowed the country with productive human capital that would have cost the U.K. £6.8 billion in spending on education.”
The findings of the study come at a time when the anti-EU immigration rhetoric has reached a new high in British politics. Prime Minister David Cameron wants to impose limits on immigration before Christmas this year, a proposal that German Chancellor Angela Merkel has strongly opposed.
She reportedly warned Mr. Cameron on the fringes of the latest EU summit in Brussels last week, according to, that she would rather see the U.K. leave the EU than compromise on the principle of free movement of people, Der Spiegel news magazine reported, quoting government sources.
The free movement of workers, along with the freedom of movement of goods, capital and services, is a central feature of the single market.
In their study, Prof. Dustmann and Dr. Frattini divide and draw comparisons between immigrants in three groups. The first comprises those from the 10 Central and East European countries — mostly of the former Socialist bloc that joined the EU in 2004 (the A10). The second comprises immigrants from the 15 other European Economic Area (EEA) countries (EU-15). The third group comprises non-EEA immigrants.
The key findings of the paper provide a strong counter-argument to the widespread notion of “benefit tourism”. Both the anti-immigration and Eurosceptic United Kingdom Independence Party (UKIP) and, with some variation in emphasis, the Conservative Party as well, hold by the view that immigrants from poor EU countries come to the U.K. to live off state benefits.
According to the research study, the net fiscal contribution of those immigrants who arrived since 2000 from the A10 countries amounted to £5 billion. The same figure for immigrants from the EU-15 was £15 billion.
“The net fiscal contribution of native U.K.-born citizens in the same period was negative, in the same period, amounting to almost £617 billion,” the paper notes.
Secondly, post-2000 immigrants to the U.K. are on average better educated than native populations. In 2011, 25 per cent of A10 immigrants, and 62 per cent of EU-15 immigrants had a university degree, as against 24 per cent among natives.
Third, the same groups, i.e. post-2000 A10 and EU-15 immigrants together, were 43 per cent less likely than natives to receive state benefits or tax credits. They were also seven per cent less likely to live in social housing.
Co-author of the study, Professor Dustmann said: “A key concern in the public debate on migration is whether immigrants contribute their fair share to the tax and welfare systems. Our new analysis draws a positive picture of the overall fiscal contribution made by recent immigrant cohorts, particularly of immigrants arriving from the EU.”
