The myths and truths of the European migration crisis

There is no price tag attached to my hand stretched out to refugees, people threatened by wars, and violent regimes. The humanitarian argument prevails over any cost-benefit analysis. But as a labor economist, I firmly believe it is my obligation to help us better understand the labor market impacts of immigration.

Fears of immigration are not new. Migrants take our jobs, lower wages, abuse the welfare state, shop for welfare, increase crime rates – these are all well-known mantras recited over and over by laymen as well as high-ranking officials. Old EU member states imposed transitional arrangements preventing citizens of new member states from entering their labor markets; the US erected a wall along its Mexican border, and Australia sends refugees to exclaves in Papua New Guinea. Razor wire fences are being erected around the EU these days. But are these fears justified?

Scientific evidence based on hard data shows that there could not be a greater divide between what is often believed and the facts about the impact of migration on labor markets. The Mariel boatlift shipped 125,000 Cuban refugees to Miami within just a few months. David Card in his 1990 study published in Industrial and Labor Relations Review showed that this influx did not affect native unemployment rates or wages. This result has been repeatedly corroborated in other contexts, and has withstood the test of post-enlargement migration in the EU, in which about three million workers moved from new to old member states within the first five years of the 2004 enlargement wave.

In fact, in our recent study (Guzi, Kahanec, and Mytna Kurekova, 2015) we show that migrants fill labor and skill shortages and that they do so more flexibly than natives. Constant (2014) concludes that migrants create jobs in receiving labor markets. Kahanec and Zimmermann (2010) corroborate these findings in the context of post-enlargement mobility in the EU.

A special issue of the International Journal of Manpower (2013) that I co-edited showed that immigrants are generally not more likely than natives to take welfare benefits (all types taken together). Although we found that immigrants were more likely to receive unemployment benefits in most EU member states, the picture reversed when we compared immigrants to comparable natives: in this case we found that immigrants were no more likely, and in several member states were less likely, to obtain unemployment benefits than comparable natives. The debate should not be about abuse, but about immigrants’ lack of access to welfare benefits and services.

The same special issue offers another important insight: Immigrants do not shop for welfare. In line with existing evidence, we found that increased welfare generosity does not lead to additional immigration. Brian Bell in his World of Labor contribution (2014) showed that immigration does not increase crime, although poor integration of immigrants may lead to an increase in property crime.

Based on existing evidence, I argue that Europe needs immigrants, particularly those with skills demanded in EU labor markets; and that we need more, and not less mobility, in these times of economic turmoil.

The current migration crisis in Europe offers the potential for a triple win: (i) provide humanitarian help to refugees; (ii) revamp our migration, asylum, and integration policies; and (iii) benefit from the new hands and brains that can boost our labor markets.

The alternative is a triple loss.

You can read and hear more about Kahanec’s views on the current European migration crisis by clicking on these links below.