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Sunday, April 29, 2012

French Economists and Immigration

Does immigration help or hurt a national economy?  That question is complex to answer because one has to determine what immigrants contribute (human capital, financial capital, taxes, jobs) versus the resources they consume (government services).  In spite of the fact that there are numerous studies that address this question, most politicians and citizens rely on anecdotal evidence or impressions or statistics pulled out of context to get their constituents to agree that something must be done about this rather ill-defined "problem."  And you have only to look at the front page of the newspapers or peek at the platforms of the various political parties in France and the U.S. to see that there is indeed a consensus that action is urgently needed.

While the politicians and the voters cogitate endlessly over this topic and whip themselves up into a state of fear and stress,  one group seems to be remarkably serene about the whole business:  economists.  Fancy that, some of the people who have the most knowledge about how immigration effects the national economy don't think it's a problem at all.

This article from Telos, Pour les économistes l’immigration n’est pas un problème , gives an excellent summary of how French economists view the issue of immigration and how they respond to various allegations about how immigration hurts the French economy.

First of all (and I was delighted to read this) economists look at the entire picture - what is referred to as the "solde migratoire" (net migration).  Flows in and flows out, folks.  Migrants don't necessarily come to France and stay forever.  For many the migration is circular - they come for a time and then they leave to return home or to move into greener pastures.  There is also a not inconsequential number of French natives who choose to leave.  So when a politician cites a scary number - a whopping  200,000 foreigners coming to France every year to live and work - that number needs to be put into context.
Cependant, face aux 200 000 entrées, on trouve un nombre conséquent de sorties de Français, mais surtout d’étrangers qui repartent. En 2010, le solde migratoire (différence annuelle entre les entrées et les sorties du territoire) se situe aux environ de 75 000 personnes.
(However, against these 200,000 coming in, there is an important number of French who leave, and a large number of foreigners who also leave.  In 2010, net migration (the annual difference between entries and exits from the national territory) was about 75,000 people.)
In a nation of 65 million people 75,000 per year is nothing.  To get some idea of how this compares to other countries, have a look at this net migration map by Index Mundi.  France has a higher net migration rate than Germany, for example, but a much lower rate compared to countries like the UK, Spain or Canada.  Frankly a net migration rate of 1.46 per 1000 does not make France a "magnet for the world."   It's respectable but not anything to get too worked up about.  Unless of course you want to ask the politically incorrect question, "Why don't more people come to or stay in France?"

What about the contention that even small numbers of immigrants have a terrible effect on natives - also known as the "They steal our jobs" argument.  Immigration is often held responsible for a lowering of salaries and a rise in unemployment.  What do the economists have to say about that?
Aux antipodes de cette perception, les économistes aboutissent, fait rare pour être signalé, à un relatif consensus sur une absence d’effets visibles négatifs sur l’emploi ou le niveau de salaire des natifs.
(Contrary to this perception, economists have come to a consensus (and this in fact is rare enough to be notable) that there doesn't seem to be any visible negative effects on employment or on natives' salary levels.)
One reason for this is that immigrants and natives are not necessarily competing for the same jobs. In France one does not see French workers falling over themselves for certain jobs in the service sector.  Another factor is industries that have a penury of skilled native workers.  If a country does not have enough people with engineering degrees (U.S.) or nursing degrees (France) they can't simply substitute a native worker who doesn't have those skills.  Or perhaps they could but who wants to be a patient at a hospital that provides on the job training to unqualified native workers?  

Economists also point out that  immigrants are consumers of good and services and they pay taxes on these things. More immigrants means more demand and more tax revenue:
Les immigrés contribuent à augmenter la demande finale de biens et de services, ce qui stimule l’activité et, par ricochet, l’emploi. Une étude récente des Nations Unies montre ainsi qu’une hausse de 1% de la population active provenant de l’immigration augmente également le PIB de 1%.
(Immigrants contribute to the rise in demand for goods and service which stimulates economic activity and, be extension, employment. A recent study by the United Nations showed that a 1% rise in the working immigrant population raised GDP by 1%.) 
So anyone looking for an economic argument against immigration is going to have to go through some pretty serious mental gymnastics to ignore all the evidence and the consensus of the economic experts that, on the balance, immigration is more often then not a Good Thing for everyone (at least in the economic realm).  Will this change anything?  Will this quiet the rhetoric against immigrants?  Not entirely because economics is only one part of the very complex and emotional arguments for or against migration. 

Still it is helpful to put a few facts on the table, raise the level of the conversation and counter the endless rhetoric that says, "Something must be done!" which only serves to send everyone into spasms of frenetic activity that have about as much useful impact as pushing air around. 

We could even (dare I say it?) go one step farther and consider that the only reason we are discussing it with so much fervor is because we have ourselves defined it as a "problem" that needs to be "fixed." France has been a nation of immigration for hundreds of years and thus far she seems to have muddled through just fine.  Looking around, I'm very pleased to see that she's still here in the year 2012 and doesn't seem the worse for wear after having welcomed millions upon millions of immigrants in times past.    Just a thought here - may I humbly suggest that we could resolve this with one simple mental leap:  just stop considering it to be a problem.  After all, if the economists aren't worried, why should you be?

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