Immigrants cost public coffers less than citizens, Dutch study finds

The widely shared view in the current political climate that immigrants place a disproportionate burden on public coffers is incorrect, according to research by Leiden University of 15 European countries. Everyone puts a burden on public finances, both immigrants and indigenous citizens take more than they contribute. But the negative balance is smaller for immigrants, who rely less heavily on social services and insurance and contribute more through premiums and taxes, the Leiden researchers found. The Netherlands did not form part of the study, but the researchers expect a similar picture.

Immigration is a loud topic of debate in many European countries, researcher Olaf van Vliet, a professor of economics at Leiden University, told NRC. “A frequently heard argument in the debate is that immigrants from Central and Eastern Europe place too great a burden on government finances and social security.” His research refutes that completely.

“Most immigrants who come to Western European countries do so to work and are between 25 and 45 years old. That makes them a group that, for example, relies less on pension payments, healthcare provisions, or unemployment benefits. Due to the aging population, an increasing share of the indigenous population is relying increasingly heavily on pensions and healthcare.”

The researchers used data from the EU’s statistics office, Eurostat, for this study. The Netherlands does not provide the relevant data to Eurostat, so did not form part of the study. But Van Vliet expects that follow-up research with the Netherlands, which he is currently working on, will yield a similar picture.

Van Vliet and his fellow researchers, Giacomo Boffi and Eduard Suari-Andreu, examined the pressure on public finances between 2007 and 2018 for three groups: indigenous residents, immigrants from within the EU, and immigrants from outside the EU. They found that non-migrant citizens put the most pressure on the public finances, followed by immigrants from outside the EU, and then immigrants from within the EU. The difference between the two immigrant groups is small and likely has to do with the composition of the groups. Non-EU immigrants include expats, who contribute a lot, but also asylum seekers who are not always allowed to work and contribute to society while their applications are ongoing. EU immigrants are allowed to work in any other EU country.

The researchers noted that the pressure on the public finances increased during the 2008 financial crisis for all groups. That recovered for immigrants from 2013 but not for natives. “Many people lost their jobs during the crisis. We, therefore, see that in all groups, they claimed more social security and contributed less. Among immigrants, we see this line go up again, while the line among natives remains flat - they also went back to work, but that effect was offset by the aging population, which caused many people to retire. As a result, they contributed less through taxes and premiums and received more state pension, pension, and healthcare,” Van Vliet said.