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Immigration offers boost to GDP



Global GDP is rising sharply as barriers to workers' freedom of movement come down. Economists of FEMISE estimate the increase to be around $56m. A free labour market in the Middle East and North Africa is having a real impact at a macroeconomic level, as you will discover.



Roby Nathanson, coordinator of the Femise report and director general of the Macro Center for Political Economics in Israel. (Photo D.R)
Roby Nathanson, coordinator of the Femise report and director general of the Macro Center for Political Economics in Israel. (Photo D.R)
The phenomenon of immigration - leaving one's loved ones behind in a poor, sometimes war-torn, country in order to build a better future in a country with better prospects - really took hold after the Second World War, and it has accelerated in the last two years in the wake of the Arab Spring. In recent months, large numbers of Syrians have fled their homeland for Tunisia. Young Egyptian graduates have also left their country of birth; not because they are being oppressed but because their qualifications are not suitable for the job market.

The Euro-Mediterranean Forum of Institutes of Economic Sciences  (Femise) has recently conducted a study on The macroeconomic impact of a free labour market in the Middle East and North Africa, led by Roby Nathanson, coordinator of the Femise report and director general of the Macro Center for Political Economics  in Israel.

The report (FEM34-06  ) highlights the need for ageing European populations to find the resources to maintain their employment levels. According to the study, a 1% rise in immigration reduces the salaries of indigenous workers by only 0.1%. The study also reveals that immigration has almost no impact on host countries' unemployment levels.

On the contrary, immigration increases productivity in these countries and helps their economies to grow. The countries from which the immigrants have come also benefit, in the form of remittances.

A European earns between four and eight times more than his counterpart from the Middle East and North Africa

So who are these immigrants? Many are from the Maghreb, having come to work in France (mainly in the construction industry) after their countries secured independence. Nowadays, increasing numbers of young graduates from the Middle East and North Africa are keen to come to Europe, and they prefer to move to a French-speaking country in order to facilitate their integration. A European earns between four and eight times more than his counterpart from the Middle East and North Africa.

Having said that, Europe is not entirely a promised land on the other side of the Mediterranean. It is not easy to find a job, particularly for migrants to France, Italy and Finland. Immigrants tend to fill positions not wanted by the native population.
Unsurprisingly, given that its countries are former colonies and share cultural similarities, North African immigrants make up 63% of foreigners in France.

Unemployment is higher among immigrants than indigenous workers, particularly with regard to unskilled labour. This situation is especially prevalent in Belgium, the Netherlands, Spain and Sweden, where immigrant unemployment is 3.5 percentage points higher than native unemployment. The job markets in Hungary, Greece, Ireland and Portugal are more favourable for foreign workers.

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Nathalie Bureau du Colombier


Wednesday, October 24th 2012



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