Immigration has delivered major economic gains for wealthy host countries over the past three decades, boosting productivity, investment and growth—even as political opposition to migration has intensified in the United States and across Europe.
A new study examined data from dozens of countries in the Organization for Economic Co-operation and Development (OECD)—which includes the United States and major European economic powers—and found that nations with higher immigration rates saw significant improvements in labor productivity in the form of worker output.
The study sheds particular light on immigration’s critical contributions to wealthy nations, where aging populations and low birth rates challenge sustainable growth. The arrival of skilled workers has emerged as a key driver of growth in several countries.
The study, led by University of California, Davis professor Giovanni Peri, is set to be presented at the European Central Bank’s annual forum in Sintra next week.
In 30 years immigrants contributed 14.5 TRILLION DOLLARS to US economy
The Cato Institute concluded that immigrants are a net positive for the US economy and government budgets. Their research showed immigrants generate substantial fiscal surplus!https://t.co/MndTrZF19D
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Immigration Linked to Higher Productivity
According to the paper, an increase in immigrants equal to 1% of a country’s population was associated with a 1.2% rise in GDP per worker within five years and a 1.9% increase over a decade.
The researchers said the gains were driven in part by stronger investment and the arrival of skilled workers, challenging claims that immigration weakens economic performance in receiving countries.
Wealthy nations reap huge benefits from immigration, study finds https://t.co/Bm4ERpgPSW
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“Receiving countries’ labor productivity grew significantly during and after periods of higher immigration rates,” the study said.
“The predictive coefficients are often significant, economically large and a significant portion of such growth in GDP per worker is realised through strong growth in investments,” the paper added.
One-Third of Growth in Some Countries
The findings suggest immigration may have accounted for as much as one-third of growth in GDP per worker in countries such as Spain, Italy and the United Kingdom between 1990 and 2024.
In Spain, the immigrant share of the adult population rose by 15 percentage points over the period. The study estimated that this could have resulted in GDP-per-worker growth being 28% higher than it would otherwise have been.
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Spain’s actual GDP per worker grew by around 75% during the same period, suggesting that immigration may have contributed up to one-third of that increase.
In the UK, the immigrant share of the population rose by 10 percentage points. The paper estimated that immigration accounted for around 19 percentage points of the country’s total 60% increase in GDP per person over the period.
Offsetting Aging Populations
The research comes as many advanced economies face aging populations and shrinking work forces. The number of immigrants arriving in OECD countries from outside the bloc rose to around 100 million in 2024, from about 25 million in 1990, while native-born population growth turned negative in several countries.
The study said immigration could help offset demographic pressures, particularly in the European Union, where natural population change has been negative since 2015 and the decline accelerated after the Covid-19 pandemic.
Recent research by the Reserve Bank of New Zealand indicates that immigration shocks lead to higher house prices and greater household credit.
Older immigrants aged 30 to 44 were more strongly linked to increases in labour productivity, whereas younger immigrants aged 15 to 29… pic.twitter.com/OfajVGnelL
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The researchers also found that the economic benefits did not disappear as immigration increased. Canada and Australia, both of which have large foreign-born populations, showed that countries could absorb more workers without losing the positive impact on productivity and investment.
The findings come amid a sharp political debate over immigration, with right-wing and anti-immigration parties gaining ground in several countries. The study, however, argues that the economic data points to substantial long-term benefits for receiving nations—benefits that have only grown as immigration rates have increased.
Kiran Asim is a writer who covers the U.S., Europe, South Asia, and the Middle East. Her reports and analyses look at the geostrategic issues and contemporary developments and their economic and political implications. She also writes about society and education.
