Effects of immigration on labour markets and government budgets: the case of the Netherlands

Abstract

Employing methods extracted from the literature, in combination with data on the Dutch economy, we assess the impact of immigration on the labour market and the public sector in the Netherlands. Additional labour supply due to immigration will have only a limited positive effect on the total income of natives, though redistribution between native groups is relatively large. The long run fiscal impact of immigrants will only be positive if their labour market performance at least equals that of natives. We conclude that selective labour immigration may contribute to the economic well-being of the host country. However, large-scale immigration of labour is not considered to be effective in alleviating the financial burden of ageing in the Netherlands.

Migrants and Welfare States

“…During this process, the attention has over time shifted from rights to duties. This indicates that the earlier policy framing did not facilitate efficient integration (Roodenburg et al, 2004). Due to high unemployment among migrants, focus has been placed on learning the Dutch language in order to facilitate integration in the Dutch society and labour market.…”

“…The migration histories of Denmark, Sweden, Germany and the Netherlands are in fact rather similar -at least until the mid-twentieth century. None of the four countries experienced large-scale immigration until the 1950s and 1960s when the so-called guest-workers came to the countries to alleviate labour shortages (Aagesen, 1971;Roodenburg et al, 2004;Schunka, 2016). Denmark, the Netherlands and Germany were all characterized as 'reluctant immigration countries' (Cornelius et al, 1994;Schwenken, 2021), whereas Sweden was much faster at embracing the multi-cultural society (Borevi, 2012;Holmqvist et al, 2020).…”