US immigrants to be given legal status (Image: Chip Somodevilla/Getty Images)

Last week, US president Barack Obama announced an executive action offering temporary legal status to some 5 million undocumented immigrants resident in the US. His political opponents vowed to oppose the measure, saying it rewards illegal behaviour.

They are not alone in seeing immigrants as a problem. English voters have just handed a second parliamentary seat to the UK Independence Party, which pledges tough measures on immigration.

Yet, says Ian Goldin of the University of Oxford, research consistently finds that migrants boost the prosperity of host countries. A study of the UK published on 4 November found that from 1995 to 2011, migrants from the European Union contributed more in taxes than they took in government benefits.


Nor is this the only benefit of immigrants. It has been known for years that immigrants boost wages in host countries. Using a mathematical model of the world economy, the World Bank said in a 2006 report that if 14.2 million workers moved from poor to rich countries between 2001 and 2025, raising the rich countries’ labour force by 3 per cent, the world’s yearly wages would grow by $772 billion by 2025.

This is a net gain of wealth in the global economy, created by giving migrants more capital and technology to work with than they would have had at home. Moreover, such wage gains feed back into global prosperity more readily than other kinds of economic boosts, such as profits, because wage-earners use the money to buy more goods and services – precisely the economic stimulus governments have been trying to bring about since the crisis of 2008.

Job creation

Analysis conducted by Giovanni Peri of the University of California, Davis, cites economic data demonstrating that immigrants, even poorly educated ones, help economic growth as businesses absorb more labour, creating new jobs for natives – often better ones as natives capitalise on educational and language advantages.

In February, Peri co-authored the first study to use mathematical models to compare legalising undocumented migrants with deporting them. When the model was fed data from the US and Mexico, it found that more deportation resulted in fewer jobs for native-born US citizens by preventing migrants from stimulating job creation by US firms. Legalising these undocumented people increased the number of migrants, boosting the economic stimulus and creating more jobs for migrants and locals alike.

Yet the argument that there aren’t enough jobs to go round is a political football. In May, a report by the UN’s International Labour Organization decried the notion that migrants are part of the problem. “Set against this are the empirically grounded assessments of the actual economic benefits of migration and the potential benefits of relaxation of limitations on it,” the report states.

Goldin attributes this misconception to the perceived downsides of migrants being short-term, whereas benefits are long-term and diffuse.

He says the answer is for governments to manage migration better by ensuring that migrants are documented, paying taxes and not competing unfairly with natives on wages and hours. That is what Obama’s measure aims to do.