Recent immigration boosts Belgian economy, long-awaited migration study finds
Thursday, 05 November 2020
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Recent immigration waves to Belgium have boosted economic growth and eased financial pressure on the deficit-laden national coffers, a long-awaited impact study by the National Bank of Belgium (NBB) found.
Published on Wednesday, the bank’s study concluded that the arrival of migrants over the past five years has boosted Belgium’s gross domestic product (GDP) by 3.5%.
The NBB drew from social security data, breaking net payment transfers by national origin to build models capable of reflecting the economic impact of immigration in Belgium.
The study further found that the difference in GDP contributions between EU and non-EU nationals was marginal (0.5%) and found no evidence backing oft-repeated claims that immigration negatively impacts Belgians’ opportunities in the job market.
“No detrimental effects of immigration are found for natives in terms of wages, unemployment, participation, net income or welfare,” the report said, noting that previous generation immigrants were more likely than natives to be impacted by an influx of new immigrants into the job market.
The NBB also said that its models implied that the overall young age of recently-arrived immigrants meant that their arrival imposed a “below-average burden” on the national coffers and contributed to inflating the tax base by 3.4%.
Eagerly anticipated by members of his party, the nationalist Nieuwe Vlaamse Alliantie (N-VA), Van Overtveldt’s aimed to have the study out in time for the 2019 election, but the bank raised “methodological objections” to finalising it so quickly.
Belgium among worst-performing EU countries on integration
As negotiations for a new federal government headed towards the final stretch, N-VA MP Yoleen Van Kamp in September called for the national bank to come out with the report, saying “Flemish people [were] entitled to the information.”
“Even the smallest child realises it has a huge financial and social impact,” she told local media at the time, adding that she had been consistently asking the bank for the report throughout the year.
The NBB noted that drawing from social security figures meant that the study did not account for immigrants with no legal residence, such as irregular or in-transit migrants, asylum seekers awaiting a decision on their file or temporary or posted workers.
As it noted that positive impacts of migration on the economy are contingent on the degree to which immigrants are integrated into the labour market, the report pinned Belgium was one of the “worst performers” in the EU in that regard.
“A higher employment rate will be associated to a larger increase in GDP and GDP per capita,” the report wrote, listing arrival channels and low education opportunities as one of the main obstacles to immigrants’ economic integration, and noting a lack of targetted public policies.
“The poor performance of Belgium in this area is found to be due to the level of education of immigrants but also to rigidities of the Belgian labour market and the fact that few policies are specifically designed to help immigrants find a job.”
2016 figures showed that second-generation immigrants were the biggest contributors to the economy (€784), surpassing the average contributions of first-generation immigrants, of both EU and non-EU origins, (€-1,905) and of native Belgians (€296).
The latter group’s costs are in part due to the fact that it contains a relatively large number of pensioners.
Highlighting differences in access to the labour market between EU and non-EU migrants —among which between 31% and 46% were found to be employed— the study found that the former made higher contributions than the latter even if they had been in Belgium for a shorter period.
Reacting to the study, staunch anti-immigration advocate and former state secretary for migration and asylum, the N-VA’s Theo Francken, referred to the study as “flawed” and “frustrating” on Twitter.
Francken —whose decision to expel Sudanese asylum seekers during his tenure as migration secretary recently earned Belgium a conviction by an EU court — criticised the study for neglecting to include the costs of “illegal immigration” and “security investments.”
In a blog post, he also said that the study’s models on the impact of non-European migration on the “prosperous West” failed to take into account the fact that, like native Belgians, immigrants would age, saying it was like “comparing apples with pears.”
The NBB’s study concludes that the positive impact of immigration on the economy depends on the degree to which policies favour immigrants’ integration into the labour market, thereby increasing their contribution to the country’s economy.
“As these results are (partly) related to differences in employment rates, raising the employment rate among immigrants (and their children) is key to enhancing their contribution to public finances.”