Welcome to the UCL European Institute, UCL's hub for research, collaboration and information on Europe and the European Union. We are part of the Institute of Advanced Studies.
John Martin, Professor of Cardiovascular Medicine at
UCL, argues that scientific advance relies on creativity, cooperation,
and financing. To leave the EU would diminish all three, dimming the
light of British science in the world and threatening the UK’s future
economy. This piece is part of the UCL European Institute’s commissioning partnership with openDemocracy. For more on this topic, join the UCL European Institute for its high-level panel discussion EU Membership and UK Science on 12 May.
10 May 2016
Starts: May 10, 2016 12:00:00 AM
Graeme Reid, Professor of Science and Research Policy at UCL, recently advised a House of Lords inquiry on the impact of EU membership on UK science and research. In this post, he discusses the inquiry’s main findings, both expected and unexpected. He also joins a high-level panel to discuss the topic at the UCL European Institute on 12 May 2016.
10 May 2016
Starts: May 10, 2016 12:00:00 AM
The Czech Republic has been in the news recently because of its politicians' somewhat quick Celtic campaign to rebrand the country to the world as ‘Czechia’. But among political scientists and businesspeople the country's name has long suffered worst damage than this.
5 May 2016
Dr Sean Hanley
Starts: May 5, 2016 12:00:00 AM
The Fiscal Effects of Immigration to the UK
Publication date: Nov 27, 2013 12:32 PM
Start: Nov 27, 2013 12:00 AM
Recent EEA immigrants to the UK have have made a net fiscal
contribution of about £22.1 billion between 2001 and 2011.
Prof Christian Dustmann and Dr Tommaso Frattini
The impact immigration has on the tax and welfare system and the net fiscal consequences of immigration is perhaps the single most important economic issue of concern in the public debate when assessing the pro’s and con’s of immigration in the UK. There are claims that immigrants from Europe free-ride on the benefit- and health system, resulting in demands that not only should their access to benefits and public services be restricted, but that immigration from European Economic Area (EEA) countries should be restricted.
Following this debate, it is surprising how little well researched evidence exists on how much immigrants take out of, and contribute to, the public purse. A recent paper we published with the Centre for Research and Analysis of Migration (CReAM) at University College London fills precisely this void. Based on the UK Labour Force Survey and a multitude of government sources, we computed the fiscal net contribution of natives and immigrants by assigning individuals their share of cost for each item of government expenditure and identifying their contribution to each source of government revenues.
Our findings were quite remarkable. The contribution of recent (post-1999) immigrants to the UK fiscal system has been consistently positive and astonishingly strong. Between 2001 and 2011, those recent EEA immigrants contributed to the fiscal system 34% more than they took out, with a net fiscal contribution of about 22.1 billion GBP. At the same time recent immigrants from non-EEA countries made a net fiscal contribution of 2.9 billion GBP, thus paying in the system about 2% more than they took out. In contrast, over the same period, natives’ fiscal payments amounted to 89% of the amount of transfers they received, or an overall negative fiscal contribution of 624.1 billion GBP. The net fiscal balance of overall immigration to the UK between 2001 and 2011 amounts therefore to a positive net contribution of about 25 billion GBP, over a period over which the UK has run an overall budget deficit.
In other words: our analysis clearly suggests that – rather than being a drain on the UK’s fiscal system – immigrants arriving since the early 2000s have made substantial net contributions to its public finances. It is a reality that contrasts starkly with the view often maintained in public debate.
Our conclusion is further supported by evidence on the degree to which immigrants receive tax credits and benefits compared to natives. Recent immigrants are 45% (18 percentage points) less likely to receive state benefits or tax credits. These differences are partly explainable by immigrants’ more favourable age-gender composition. However, even when compared to natives with the same age, gender composition, and education, recent immigrants are still 21% less likely than natives to receive benefits.
We can thus conclude that the recent waves of immigrants – i.e., those who arrived to the UK since 2000 and who have thus driven the stark increase in the UK’s foreign born population – contributed far more in taxes than they received in benefits.
We also want to point out that immigrants, by sharing the cost of fixed public expenditures (such as defence), which account for 23% of total public expenditure, reduce the financial burden of these fixed public obligations for natives. In addition, most immigrants arrive to the UK after completing their education abroad, and thus at a point in their lifetime where the discounted net value of their future net fiscal payments is positive. If the UK had to provide domestically to each immigrant the level of education they have acquired in their home country (as it does for natives), the costs would be very substantial.
Finally, our research has shown just how strong the educational back ground is of immigrants who come to the UK. For instance, while by 2011, the percentage of natives with a degree was 21%, that of EEA and non-EEA immigrants was 32% and 38%, respectively. Similarly, about one in two native born individuals fall into the “low education” category (defined as those who left full- time education before 17), while only one in five EEA immigrants and one in four non-EEA immigrants do so.