Migrant Workers Strengthen Public Finances of European Countries

Migrant workers have strengthened the public finances of most countries in Europe, particularly in Switzerland, Cyprus, Norway, and Belgium, according to a study published on Thursday.

These four countries have benefited the most as they have accepted a relatively large number of workers from the EU, many of whom are highly qualified, the study from Uppsala University in Sweden revealed.

– Our analysis shows that in most countries of the European Economic Area, EU citizens pay slightly higher taxes and other contributions to the state than they receive in services, which means they provide a net fiscal contribution, said co-author of the report Rafael Ahlskog.

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According to the authors, the report is the first major analysis of the impact of European migration on public finances in the European Economic Area, which includes 28 EU member states plus Norway, Iceland, and Liechtenstein, as well as Switzerland.

Other scientific studies have also suggested that migration in the EU helps the public finances of host countries, although, as the latest study showed, their impact is generally considered small when measured as a share of their gross domestic product (GDP).

Countries in Eastern Europe at a loss

The Uppsala University report showed that 21 out of 29 countries covered by the study benefited in their state treasury from EU migration, while seven countries from Eastern Europe plus Ireland were at a loss because migrants in the EU in those countries were older or lower-paid.

Switzerland recorded the largest net positive contribution to public finances, amounting to 1.7 percent of GDP. Cyprus follows with 1.3 percent, and Norway and Belgium, each with 0.8 percent of GDP.

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In the United Kingdom, where concerns about immigration played a role in voters’ decision in 2016 to leave the EU, the contribution to the state treasury from immigrants from other EU countries was 0.3 percent of GDP.

The report did not consider the impact of emigration on the public finances of home countries, usually those in Eastern Europe, which have lost a multitude of working-age citizens, putting pressure on public spending financing.