Despite prevailing media narratives, a new IZA discussion paper by Kelsey J. O’Connor of STATEC Research indicates that the significant increase in immigration to Europe between 1990 and 2019 has not negatively impacted the average well-being of either destination or sending countries. In fact, when considering the substantial gains experienced by immigrants themselves, the overall impact shifts from a net cost to a net benefit.
The study, which analyzed data from 37 European countries over nearly four decades, found that Europe saw an influx of 32 million immigrants between 1990 and 2019. Much of this movement was from East to West, with the Western Bloc experiencing net immigration of approximately 30 million people, while the Eastern Bloc saw a net emigration of about 12 million. The majority of immigrants typically originated from within Europe, with exceptions noted in Northern Europe (Denmark, Finland, Norway, Sweden) and to some extent Southern Europe (Italy, Spain, Portugal, Greece). In Central and Eastern European countries, less than 20 percent of immigrants were from outside Europe on average.
Immigration significantly shaped population dynamics. Eastern Bloc countries collectively experienced a population decline of over 24 million during the period, exceeding the current population of the Netherlands. Conversely, Southern Europe’s population grew by nearly 13 million, with immigrants accounting for 11 million of that increase.
Life satisfaction as a measure of overall well-being
To assess the broader impacts of migration, O’Connor employed a comprehensive subjective measure of well-being: life satisfaction. This approach captures both the economic and non-economic effects of immigration. The rigorous regression analysis revealed no discernible impact of the immigrant share of the population on destination countries’ life satisfaction. Furthermore, there was no reliable negative impact of the emigrant share on sending countries’ life satisfaction; if anything, a positive effect was observed, likely due to remittances sent home by those who moved away.
While no aggregate well-being costs were found for either destination or sending countries, immigrants themselves experienced considerable benefits. The study found that new immigrants likely experienced a lasting increase of 0.4 points on a 1-to-10 life satisfaction scale on average. This is a substantial gain, comparable to the negative effect of becoming unemployed, and is valued at approximately 30,000 euros for a period of five years, with benefits increasing over longer durations. Unsurprisingly, people tend to migrate from countries with lower life satisfaction to those with higher levels. Importantly, the life satisfaction of immigrants tends to converge with that of natives over time.
The research draws upon data from reputable sources including the United Nations Population Division, the World Bank, and the European Values Study. While acknowledging that effects could vary across subpopulations, the author emphasizes that the aggregate null effects on local populations suggest any potential negative impacts could be offset by redistributing benefits gained elsewhere.
Diversity can enrich non-market experiences
O’Connor highlights a key strength of this study: unlike much previous research that focused on narrower outcomes, this analysis captures all factors individuals deem relevant to their overall lives. This includes considerations such as job competition, fiscal solvency, social cohesion, safety, and the availability of less expensive and more diverse goods and services. The author also notes that diversity can enrich non-market experiences that are otherwise difficult to quantify.
In conclusion, O’Connor advocates for the liberalization of immigration policy, based on the findings that immigration yields substantial benefits to immigrants without imposing aggregate well-being costs on destination or sending countries.