Immigration Spurs Economic Growth in Advanced Nations, IMF Says

(Bloomberg) -- Immigration to advanced economies boosts productivity and output over the short and medium term, with new workers complementing native-born populations, according to the International Monetary Fund.

Every one percentage-point increase in the inflow of immigrants relative to total employment in rich nations increases output almost 1% by the fifth year, the IMF said in the latest chapter of its World Economic Outlook published Friday. The productivity increases caused by immigrants also benefit the average incomes of native workers, the Washington-based organization said.

The report comes as President Donald Trump’s administration has developed proposals severely limiting employment-based immigration visas as the U.S. grapples with the coronavirus pandemic. Trump has said he wants to protect American jobs from foreign competition amid double-digit unemployment. Immigration also has been a focus of debate in Europe and was a factor for U.K. voters who chose to leave the European Union.

Immigrants in advanced economies make up about 12% of the total population, up from 7% in 1990, the IMF said. The Fund forecasts the increase to continue in the next 30 years amid rapid population growth in emerging markets and developing economies, particularly in sub-Saharan Africa, even if higher incomes partly alleviate pressures. Advanced economies continue to attract people due to per capita gross domestic product that’s five times that of less-developed nations, the IMF said.

While the report suggests that average gains from migration are large and have potential benefits if managed well, it doesn’t consider all aspects of the phenomenon, such as native workers who face increased competition, the IMF said. The Fund urged nations to adopt training and adult education programs to better integrate migrants and amplify the positive effects from their immigration.

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