Background: In the Netherlands, it is customary to include ‘propositions’, essentially opinionated statements defended alongside one’s doctoral work. In this post series, I am outlining the arguments supporting my propositions.

Proposition #9: European countries must position themselves as attractive destinations for international immigration.

Hot take? Maybe.

Immigration has been in the news as a political scapegoat, blamed for anything from inflation to housing prices. All of these are real and important problems. Take the Netherlands as an example of a European country. It has experienced major housing shortages recently and is projected to continue to do so for another decade. This leads to a lot of frustration among Dutch population, and understandably so. Politicians have blamed immigration as a major contributor to this, and other problems. Consequently, the general attitude of the population towards international migration has shifted, becoming more negative.

This negative sentiment has been pervasive in the developed world and led to rise of right-wing parties and anti-immigration policies, including recently in the Netherlands and the United States. I find this political shift imprudent and, in the long run, damaging to local economies. Instead, I argue, countries, and particularly the European ones, should try to attract more immigrants. Below I outline a few arguments for why.

Migration is human universal

All the news would have you think migration is a recent phenomenon. That’s not true. Humans have been migrating since they were humans. Archeological evidence points to spread of anatomically modern humans from East Africa to the rest of the world.¹ Even before then, members of the Homo genus are known to have migrated both within the African continent and out of it.² Going ahead in time, both ancient and modern human history is essentially a history of migration. Many examples are available.

The spread of Indo-European languages and cultures is linked to migrations from the steppes of Central Asia into Europe and parts of Asia (ca 3500 BC – 1500 BC). This movement contributed to the establishment of various civilizations, including the Greeks, Romans, and Persians.

Bantu migrations from West Africa into Central, Eastern, and Southern Africa (ca 1000 BC – 500 AD) involved the spread of agriculture, ironworking technology, and language. This movement contributed to the establishment of complex societies and kingdoms across Africa.

Following the decline of the Roman Empire, various groups such as the Goths, Vandals, and Huns migrated across Europe during the Migration Age, or so called Barbarian Invasions (ca 300 – 750 AD). This period saw significant cultural shifts and the formation of new kingdoms that laid the groundwork for modern European nations.

During the European Colonization of the Americas (15th–17th century), millions of Europeans migrated to the New World, establishing colonies that transformed indigenous societies and ecosystems. These migrations marked the beginning of global trade networks and the Columbian Exchange, which involved mutual exchange of foods (e.g. potato, rice), diseases (e.g. smallpox and syphilis), and more. Following this, the Great Atlantic Migration (19^th - early 20^th century) saw millions of Europeans moving to North America from countries like Ireland, Germany, and Italy due to economic opportunities and political unrest. This influx significantly shaped the American demographics and culture of today.

Even when we look at very recent history, the oft-touted claim that migration is getting out of hand simply does not hold. The share of global migrants has been steady at around 3% of global population over the past 50 years.

Migration drives development, and lack of it hinders it

It is difficult to argue against migration as an engine of cultural and economic development throughout history given the numerous examples highlighted above. Even naively, it seems highly unlikely that anything should change about this in modern times, and migration would suddenly become a burden. But let’s look at some more recent data.

One way to look at the contribution of migration to countries’ economies is to look at consequences of interventions designed to curb it. In 1882, the U.S. government introduced the, at that time widely popular, Chinese Exclusion Act. At that time, Chinese migrants constituted about 20% of all migrants in the western states, and local population argued that these migrants reduced their economic opportunities. A recent HBS and NBER working paper examined the consequences of this act, concluding that:³

“The Act reduced the number of Chinese workers of all skill levels residing in the U.S. It also reduced the labor supply and the quality of jobs held by white and U.S.-born workers, the intended beneficiaries of the Act, and reduced manufacturing output. The results suggest that the Chinese Exclusion Act slowed economic growth in western states until at least 1940.”

In 1920’s, with goals to protect local jobs, the U.S. introduced set of measures to curb international immigration. The Emergency Quota Act (1921) and the subsequent Immigration Act of 1924, introduced global and country-wide quota on migration. Consequently, total immigration to the U.S. dropped by some 80%. Migrants from Asia were entirely banned, and migrants from Eastern and Southern Europe were heavily disfavored. Number of papers examined the consequences of this act, reaching the conclusion that it neither helped protect jobs for Americans, nor drove economic growth. Industries relying on immigrant workforce either shifted to more capital-intensive, less labor-intensive, approaches, or they shrunk. Despite the loss of immigrant labor supply, the wages of US-born workers declined.⁴

Labor shortages drive migration

Above, I discussed evidence for migration as a driver for economic development. A natural question to consider next is, what drives migration? Anywhere you live, you have probably been delt with the imagery of migrants fleeing from unsafe regions. While a portion certainly does that, it is a minority. For example, in the Netherlands, less than 10% of all immigrants in 2023 were asylum seekers, and less than 20% of that eventually qualified a as refugees. Instead, most migrants arrive to compensate for labor shortages.

In the Netherlands, data shows that the rate of immigration closely tracks the rate of creation of new jobs. International migrants are a critical component of both seasonal and permanent workforce across the globe. In the US, California’s Central Valley is the nation’s largest agricultural producing region. Two-thirds of farmworkers there are undocumented labor migrants. The British NHS is famously known to rely heavily poorly paid immigrant labor, and has experienced significant challenges after Brexit. A recent study from NBER examined immigrant labor in nursing homes in the US, finding that immigrants help fill labor shortages, which translates to improved patient outcomes.⁵

“We show that increased immigration significantly raises the staffing levels of nursing homes in the U.S., particularly in full time positions. We then show that this has an associated very positive effect on patient outcomes […].”

Most people agree that migrants fill roles the local population does not aspire to occupy. People cleaning offices, driving Ubers, and delivering food are commonly migrants. Their jobs are often relatively low-skill, low-pay and have poor job security. These jobs are critical and have an important contribution to overall availability and quality of services for the local population. They are generally not jobs locals aspire to have.

Maybe the most important argument pointing to how critical immigrant labor is, comes from this laughing contradiction – despite migrants being touted as source of evil by politicians, rarely anybody gets persecuted for employing them. In the US, data indicates that in the year from April 2018 to March 2019, only 11 individuals were prosecuted for illegally employing undocumented workers, with no companies facing charges during that period. In contrast, 85,000 prosecutions for illegal entry and re-entry during the same timeframe have been issued.⁶ Historically, prosecutions of employers have rarely exceeded 15 cases annually. While the UK has recently announced strengthening of oversight for undocumented labor (labour that is), historically the enforcement has been virtually nonexistent. In 2017, only 3 individuals were persecuted for employing illegal immigrants.⁷

Migrants are a desirable demographic

Above we have seen that migration has been, and continues to be, an important part of human history, that efforts trying to curb migration tend to lead to negative economic consequences, and that migrants mostly compensate for labor shortages in the countries of their arrival. In this section, I argue that, in addition to the above benefits, migrants are also a desirable demographic to attract.

“We wanted workers, but we got people instead.” – Max Frisch

Migration is a demanding and risk-taking behavior. Data shows that it is the younger, healthier, more educated, more well-off, and harder working people that decide to migrate. Recent Pew Research study surveyed children of immigrants and found out that they are more likely to believe in the value of hard work than the general population, and see it as means to get ahead in life.

And the hard work pays out. While the first generation of migrants has lower salaries and poorer educational outcomes than the native population, the trend equalizes or even reverses already in the following generation. The second generation of immigrants is more likely to graduate from college, and less likely to live in poverty then the general population. They earn the same salaries as locals, and are equally likely to own a home. ⁸ While politicians like to picture immigrants as criminals, data overwhelmingly points to the opposite trend. Migrants are less likely to commit crimes than natives.

Even the trivial aspect of migrants generally being relatively young has important consequences. The median age in Europe has increased on average by 0.25 years over the past decade, reaching 44.5 in in 2023. ⁹ The consequence is that fewer and fewer people are in the working population, while increasing share is in retirement, drawing state benefits. Older people also tend to use healthcare more. To maintain sustainability of the retirement model, it is vital to make the population younger on average. This is difficult. People in developed countries are having fewer and fewer children and live longer. The number of U.S. centenarians is projected to quadruple by 2054. Immigration should be part of the answer to this challenge. European countries with positive net immigration are aging much slower than countries with net emigration. Additionally, immigrants tend to use fewer healthcare services than comparably aged locals, further adding to their net contribution.

Another way to describe the migrant demographic could be to consider their level of attainment of exceptional achievements. If a significant portion of these achievements are met by those foreign-born, it seems likely they are overall better trained and more ambitious than locals, and a net positive to the country. The Nobel Prize is widely regarded as the most important recognition of scientific merit. The U.S. is home to the most winners of this prize, with the proportion of foreign-born winners exceeding 30%, and mostly 40%, over the past 20 years.

Conclusion

Above, I highlighted some arguments why I believe countries must position themselves as attractive destinations for international migrants. Over the course of history, migration has been associated with cultural, societal and economic development. Efforts to curb migration produced negative consequences for economies implementing them, and their local workforce. Migration is human universal; people will keep seeking better opportunities and brighter futures for themselves and their children. It tends to be the younger, healthier and more ambitious that decide to migrate. While the USA has historically been the strongest magnet for international migrants, the current political leadership sees this phenomenon as unfavorable. In the fight for international talent, this represents an opportunity for European countries to show better and more forward-looking leadership, becoming relatively more attractive immigration destinations.

In this article, I described immigration as net positive, and this is something I believe is well supported by the data I included. However, I understand that immigration, and immigrant population, face and bring about unique challenges. A policy that welcomes everybody, without regard to their situation and motives, is not something I advocate for. In fact, I would argue that while countries must position themselves as attractive destinations for international migration, they should also be selective about whom they allow to settle, and how they distribute benefits to pre-settlers. This position is arguably more economically neoliberal than the European average, but I do consider it important for increasing the competitiveness of the region. An argument for why we need that is something that I am happy to delve into in some future post.

Further reading

• Milton Friedman - Illegal Immigration is Beneficial to the US
• For 7th Consecutive Year, Visa Overstays Exceeded Illegal Border Crossings

References