Trade, Development, and Immigration

Immigration brings economic benefits says leading economist


Markets and Morality

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Economist Diane Coyle challenges many widely held assumptions about immigration.
In an article published today in the IEA’s journal Economic Affairs, economist Diane Coyle challenges many widely held assumptions about immigration. Coyle argues that immigration to the UK has brought not only enormous economic benefits – including helping to keep interest rates low and filling skill shortages – but also economic benefits to the migrants’ countries of origin.

According to Coyle, migrants do not take jobs from indigenous workers. Rather, ‘migrants tend to go where labour demand is buoyant’ and most migrants are very highly skilled or less skilled than average, suggesting that they are filling shortages in the labour market rather than competing directly with native-born labour.

It is not the case that the economic benefits of immigration are conferred only on the host country. On the contrary, migrants send substantial sums of money home, to the extent that such remittances now dwarf official development assistance and are on broadly the same scale as annual flows of FDI to developing countries.

As Coyle notes, the subject of immigration often arouses heated passions – not least among senior politicians – ‘which makes it all the more appropriate for an economist to wade in wielding a fire extinguisher’. Coyle’s application of sound economic analysis to this important policy question suggests that the benefits of immigration often exceed the costs.

Read the article here.