The Economic Benefits of Immigration

Written by Kruti Beesam

It is known to all that immigration can open up a lot of opportunities to people, than those available in their home country. But, very few know that a country welcoming the immigrants also benefits from this process. Most of these benefits of immigration fall in the economic category. To start with, a sudden increase in the availability of labour reduces the wages to a great extent.

The Benefits Reaped By America

The Benefits Reaped By America

As a result, a large amount of money of the home country is saved. In this regard, the United States of America saw a heavy inflow of labor in 19th century, to take up jobs in industrialization and electrification sector in the country. But soon, the inflow of labor experienced a severe blow in the year 1929 with the passing of the restrict immigration laws.

It is noted that when a country possesses the ability to manage labor inflow efficiently, it experiences a greater economic benefit than otherwise. Countries expand their productive capacity, when a large number of immigrants start coming in. Better productivity is a direct result of greater investment. The large number of working labor, encourage investors to put their money in the development of the host country.

In the last 50 years, once again, the United States of America proved to be successful in making the best use of immigrants who were looking for brighter career opportunities outside of their home countries. USA’s move proved to be beneficial to both the immigrant and USA itself.

A reflection of this was seen in the period 1990-2010, when 30 percent of the country’s productivity is attributed to immigrants. Similarly in the year 2006 the country saw that, as much as 25 percent of the high tech companies in the U.S., are established by the immigrants in the country. The productive capacity of these establishments is not to be underestimated as they have been successful in making sales of over a million dollars.

The contribution that the immigrants are able to make, for the economic development of countries like the United States of America, is because of the high level of education the immigrants have acquired. This is something the natives have not been very successful with. It is commonly observed in the USA that the immigrants take up those jobs that the natives do not take or are not interested in. As a result, this makes sure that there is no lack of service, despite less number of takers within the country.

UK’s Profit Story


Moving to the other part of the globe, research reveals that the United Kingdom has immensely benefited in terms of aggregate demand and total spending within the country.

The UK focuses greatly on specific section of immigrant population in particular periods of time. The use of this approach has proven to be beneficial for the country’s economy. In 2010 alone there were as many as 428,225 immigrants migrating to the United Kingdom. Although it cannot be considered as a long term economic benefit, the short term benefit it brought cannot be ignored.

The amount of money collected as fee from these immigrant students, summed up to £2.5 billion in an year. The amount so collected was in turn used to provide financial support for higher education of the native students of UK.   It is a popular habit of the United Kingdom, to make use of static approach, to measure the fiscal benefit reaped from immigrants from various parts of the globe.

The static approach takes into account, the contributions made by immigrants to public finances and the services availed by them in the UK. For a fiscal benefit, a balance needs to be created between these two factors. The simplicity and reliance on historic data are the reasons behind the popularity of the static approach. However, it must be kept in mind that the fiscal benefit from the immigrants to UK depends on a wide range of factors.Among all, factors like skills, age and length of stay seem to play a crucial role.

Canada Too Benefits From Its Immigrants

Canada Too Benefits From Its Immigrants

Canada talks of benefits in terms of innovation, when migrants choose the country as their career destination. The fact was confirmed by a Conference Board of Canada, that undertook a study to find that 35 percent of researchers the university are migrants from various countries of the world.

Another area, that Canada has seen improvement in because of immigrants, is the trade sector. It has been revealed that an increase in 1 percent of immigrants have resulted in an increase of the value of Canadian exports to 0.1 percent. Further, when large numbers of immigrants come to a country, they bring along with them a desire for native goods. Immigration in turn enhances the value of imports, of the host country.

Canada too experienced a similar benefit in this regard, where the countries import value went up to 0.2 percent. The credit of this improvement goes to the desire for their native goods that immigrants bring with them.

Australia Improves Its Economy through Migrant Students

Australia Improves Its Economy through Migrant Students

Student migration contributes to the Australian economy to a great extent. Students who come to study in Australia tend to pay the entire fee, while the natives are entitled to a subsidy. Now the profit Australian government makes, in this context is obvious. Apart from this, a major share of migrants to Australia, fall under the working age, who contribute by improving the country’s productive capacity.

Immigration is ultimately a beneficial decision that improves the life of an individual while improving the country’s economy. So, when countries around the world understand this little secret, they open up to greater opportunity for rapid economic growth!

Data Source: Berkeley Review | Manhattan Institute of Policy Research | Economic Help | The Migration Observatory

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