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Home BUSINESSImmigrants have economic positive effect: Finnish think tank
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Sun, 08 Jun, 2014 12:00:08 AM
FTimes- Xinhua Report by Denise Wall, June 08

 

While the European political spectrum has witnessed the rise of right wings, a Finnish government economic think tank says that immigration could improve economic prospects for migrants as well as native Finns.

The Government Institute for Economic Research VATT recently released the results of an extensive study showing that the benefits immigrants can offer depend on how well they fare in the Finnish employment market.
    
"Our message is that immigration could improve the economic wellbeing of migrants as well as Finns," the researchers said in the report.
    
However, they pointed out that this finding depends whether migrants sink or swim in the Finnish labor market. That in turn hinges on national integration and training policies.
    
Researcher Matti Sarvimaki led the research, which looked at Finland's brief 25-year history of immigration from the 1980s to 2012 to draw conclusions about migrants' economic impact.
    
A similar British study concluded late last year that migrants from the European Economic Area tended to pay 34 percent more in taxes than they received in benefits between 2001 and 2011. Overall migrants made a net contribution of nearly 31 billion euros to the British economy since 2000.
    
Aside from empirical data, immigration has become a political flashpoint in both Britain and Finland, with both countries seeing a surge in support for nationalist anti-immigration political forces in recent times.
    
The Eurosceptic UK Independence Party UKIP recently trumped mainstream conservative forces to garner 27 percent of the vote and 24 of Britain's 73 seats in May's European Parliament elections.
    
In Finland, the populist immigration-critical Finns Party built on a growing wave of popularity since the 2011 parliamentary elections secured a second seat in this year's European Parliament elections. A recent poll by the public broadcaster Yle ranked the party in third place among political heavyweights with nearly 19 percent voter approval.
    
These outcomes reflected a clear public unease with a primary tenet of the European Union: the free movement of people and labor within the region. The VATT researchers acknowledged the rising stridency of the immigration debate in Finland.
    
The VATT analysis aims to support the debate about immigration in Finland by offering new research and an economic perspective. According to the study results, it doesn't look like migrants. as a group, are holding their own against their Finnish peers financially.
    
"Currently immigrants living in Finland earn on average significantly less than Finns of the same age. The differences have narrowed as the duration of their stay has lengthened but they have not disappeared," the report said.
    
On average, the data show that for the period reviewed from 1995 to 2011, migrants had one-third less disposable income than native Finns. Employment levels among immigrants also lagged behind.
    
The man-on-the-street view is that newcomers to the country will compete for jobs, putting native residents at a disadvantage.
    
"Of course for some Finns immigration means stiffer competition in the job market," said Sarvimaki.
    
"However the research results show that the impact on salaries and employment among native Finns are small. It's likely that immigration could impact on Finns' economic situation more via public finances than via the labor market," he added.
    
Even here the empirical evidence seems to defy conventional wisdom. According to senior VATT economist Essi Eerola, working-age migrants who have fared well Finnish job market clearly have a positive impact on public finances.
    
"This is mainly due to the fact that the cost of public services in the early stages of the life cycle has been spent somewhere else," she explained, referring to the likely cost of education and health care in childhood and early adulthood.
    
The researchers said that immigrants increase demand for goods and services, drive an expansion of product and service offerings and help lower consumer prices. However Eerola pointed out that where migrants -- and their children -- remain outside the workforce the net effect is negative.
    
The researchers concluded that the key to successful immigrants contributing to Finnish economic wellbeing lies with well-crafted integration and education programs that help migrants find their place in the local job market and the wider society.  
 
 
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