Public Release: 

Asylum seekers positively affect host countries' economy, though on slower timescale

Macroeconomic evidence suggests that asylum seekers are not a 'burden' for Western European countries

American Association for the Advancement of Science

Asylum seekers fleeing to Western European countries to escape war-ridden areas positively affect a host countries' economy, according to a new report that analyzes 30 years' worth of economic and migration data. While asylum seekers take longer than migrants to have a positive economic effect on host countries, the study reveals, the latter still do positively affect the economies they enter, by contributing more in tax revenues than is required of public spending after a specific time, among other effects. In 2015, Europe alone received more than one million asylum applications - a situation that many refer to as the "migrant crisis." Studies to date aiming to quantify the effects of migration on a host country's economy have mainly focused on the effects of permanent migration - and not of asylum seekers, people who state they are unable to return to their country of origin because of a well-founded fear of being persecuted. Here, to provide insights into the effects of the latter group, Hippolyte d'Albis et al. analyzed annual economic and migration data spanning the period 1985 to 2015, for 15 Western Europe countries (including those that receive most of the asylum applications in Europe). The researchers applied a so-called panel vector autoregressive (VAR) model, which quantifies an economy's response to an unusual external event, or "shock," such as major demographic changes that could impact public finances. They found that the flows of asylum seekers and permanent migrants, respectively, had positive effects on European countries; namely, both significantly increased per capita gross domestic product, reduced unemployment and improved public finance balances; additional public expense, which is usually referred to as the "refugee burden," is more than outweighed by the increase in tax revenues, the authors say. While the effects of migrants' net flow were positive from the year of the shock, however, and remained positive for at least two years, asylum seekers' effects took longer to positively affect the economy (about one to seven years post-shock, the authors say). The authors say their results suggest that the migrant crisis currently experienced by Europe is not likely to provoke an economic crisis but might rather be an economic opportunity.


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