Monday, 22 May 2017

Most studies of the economics of immigration are useless.

There’s a very simple reason. Most of them do not consider a HUGE cost that net immigrants impose on host countries, which is the fact that each person requires several tens of thousands of pounds worth of infrastructure and other forms of capital, like housing. (The phrase “net immigrant” refers to the excess of immigration over emigration.)

Thus for each net immigrant, taxes have to be imposed on existing residents of the country to pay for the infrastructure that each net immigrant requires.

Of course the latter point assumes that the host country ACTUALLY DOES create suitable amounts of infrastructure when net immigrants arrive or shortly thereafter. An alternative assumption (one that actually occurs in the real world to some extent no doubt) is that the host country FAILS to create suitable amounts of infrastructure. But the result is still a burden placed on the host country: in the form of overcrowded or inadequate infrastructure.

The above infrastructure point is not to deny that OVER THE LIFE-TIME of each net immigrant, those immigrants will pay, roughly speaking, enough tax to cover their contribution to the country’s infrastructure. But certainly during net immigrants’ first decade or two in the host country, they are “free riders”, thus on balance over their lifetimes, net immigrants do not pay their fair share of infrastructure costs.

As for what the total value of infrastructure and other forms of capital per head is, this study puts the figure at £141,000. The title of the study is “Warning: Immigration Can Seriously Damage Your Wealth” and is published by the Social Affairs Unit. £141,000 is a HUGE AMOUNT.

That is not to suggest that all net immigrants on arrival owe the host country £141k. The issue is more complicated than that. For example the amount of capital that immigrants bring with the must be taken into account. But the size of that figure does mean that to TOTALLY IGNORE the above infrastructure point in any study which purports to measure the costs and benefits of immigration is a huge blunder. And most such studies do in fact ignore the above infrastructure point.

Thus, to quote the title of this article, most such studies are “useless”.


  1. This article neglects the effect of a society experiencing demographic decline.

    Europe's fertility rate of 1.6 is well below the replacement fertility rate of 2.1 necessary to maintain a stable population.

    Those immigrants flowing into Europe can make use of the infrastructure that those dying Europeans leave behind.

  2. That would be true if immigrants exactly made up for demographic decline. But in the UK there is NET immigration, as pointed out above. (The figures above all refer to the UK, where I live, something I ought to have mentioned.)

    Also there are no desperately good reasons to avoid demographic decline. First, the human race imposes catastrophic damage on the environment. So approximately halving the human population over the next century or so would probably do no harm. Second, each country presumably has some sort of optimum population. There’s an organisation called “Population Matters” which puts the UK’s optimum population at 30 million, for what that’s worth.

  3. Ralph, have any of your posts covered the issue of immigration/ support ratio > government creation of money as a solution?

    1. Not sure what you're asking. Can your clarify?

    2. The oft-heard argument for immigration (or one of them) is the need for immigration to balance out the support ratio of those who are working versus non-working (

      Immigrants come and are net contributors (this is often disputed).

      One area that PositiveMoney etc could contribute to is offsetting this Ponzi scheme by contributing to the welfare (predominantly pensions) bill and further relegating the spurious immigration-welfare argument to the bin.

      I just wondered whether from your various money creation proposals you had written on issues closely pertaining to any of these issues?

    3. Strange as it might sound, I normally find out what I have written on different subjects by Googling. Reason is that I've written so much I can't remember what I've written!!!

      Anyway, after a few minutes Googling, I found this:

      You might possibly find more by Googling. As to whether immigrants are really needed to solve the alleged ageing problem the 2nd chapter of this book (link below) says that while there is obviously a significant demographic problem, it's not a major problem and can be managed without mass immigration.

    4. That's great Ralph, I did try the same before asking, but thanks for taking the time and I will look at both, much appreciated.


Post a comment.