October 20, 2015    3 minute read

How Europe’s economy is influenced by refugees

   October 20, 2015    3 minute read

How Europe’s economy is influenced by refugees

The impact of thousands refugees from Syria and Afghanistan could be useful for European countries. Europe is experiencing the worst refugee crisis since the second world war. About a half a million people throughout this year (twice more than in 2014) have crossed Eastern European countries to reach wealthier ones, such as Germany and the United Kingdom. Approximately 3 thousand have died, but more and more people arrive every day fleeing war zones in Syria, Eritrea and Afghanistan.

Beyond the doubtful logistical and humanitarian concerns brought to Europe by large influx of refugees, analysts predicted slight and perhaps even positive economic impact of asylum seekers on Europe.

“Welcoming refugees offers Europe the chance not only to honour its position as a democratic Union that is wealthy and respectful of tradition, but also to expand its growth prospects”

Patrick Artus, Economist at Natixis

By ‘growth’, Artus means diverse conceptions. Economists see in refugees not a challenge or a treat, but a demographic opportunity. Total fertility rate in Europe is hardly over 1.5 children per woman and only due to migration working age population is not shrinking yet. For example, in Germany jobs are created faster than the natives can fill them. From that point, it is better for Europe not only to accept refugees, but welcome the indirect increase in the labor force. It has resulted in a consequential increase in employment and GDP, by which native-born did not experience any significant negative impacts on the employment rate.

“The arrival of refugees could boost economic output in the eurozone by 0.2 percent as of the second half of 2015”

Holger Schmieding, Economist at Berenberg Bank

The fine example of Schmieding’s words is the research of University College London. It stated that both European and non-European immigrants made a noticeable contribution to the UK’s economy. Refugees from outside Europe brought £35 billion worth of education with them since the year 1995. Moreover, those who arrived between 2000 and 2011 in contrast to native Brits were not likely to stay on state benefits nor live in social housing. During that period, immigrants contributed a net £5 billion in taxes. The positive effect of giving a refuge can be substantial: Carlos Vargas-Silva of the Migration Observatory at the University of Oxford reported this year that letting in 260,000 immigrants a year could halve the UK’s public debt in 50 years.

“The crisis represents an opportunity for Europeans to jump-start the continent’s economy.”

Thomas Piketty, the celebrated author of “Capital in the 21st Century”

It is notorious that new immigrants are increasingly well qualified due to the poorest lack the means to leave, said El Mouhoub Mouhoud, economics analyst at the Paris Dauphine University. He argued that refugee migrants are an investment into the sheltering country, undoubted bonus to their economic growth. In the nearest future, Europe will have to handle cultural differences and maintain its asylum rules. More refugees are coming, that is why every field involved in sheltering immigrants must be under control. Thus, European’s economic growth will boost.

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