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Migrant Population in the U.K.: Fiscal Effects

NCJ Number
Ceri Gott; Karl Johnston
Date Published
44 pages
This comprehensive analysis of the fiscal effects of first generation United Kingdom migrants demonstrates an overall net fiscal contribution to the U.K. economy.
Through an extensive review of the empirical and theoretical literature the authors examine the overall fiscal effect of United Kingdom migrants on the country's economy. Several factors associated with subsequent fiscal outcomes are analyzed including age, economic activity, skills, qualifications, and route of entry. Migrants produce indirect fiscal effects through the introduction of new industries and the provision of methods for increased efficiency and productivity in existing labor markets. Direct fiscal effects of migrants include income earned and taxes paid. Both indirect and direct fiscal effects result in economic gains for the host country. Based on the analysis of a sample of first generation United Kingdom migrants, the authors conclude that migrants produce a net fiscal contribution through indirect and direct fiscal effects. The authors caution that the migrant population is heterogeneous and some migrants are more prosperous than others. The less prosperous migrants may contribute a negative fiscal effect. Government policies aimed at improving language fluency, increasing skill levels, increasing the employment rate, and promoting social inclusion can minimize the negative fiscal impact of migration in the United Kingdom. Appendices, references