Impact of the Rise in Immigrant Unemployment on Public Finances

Has the rise in immigrants'unemployment an impact on public finances? To what extent is the current slump having an impact on the employment of immigrants? And what are the factors depending on it?

About this study:

The current slump is having a heterogeneous impact on the EU economies regarding their GDP and employment growth responses. The impact of immigrants’ unemployment on public finances of EU countries depends on three factors: (i) the sensitiveness of the economy to the business cycle, (ii) the share that migrants represent over total labour force population and (iii) the benefits structure of their unemployment benefits programs.

The results of this FEDEA study confirm that the impact of the rise in immigrants’ unemployment on the unemployment benefit burden during the next few years is likely to be sizeable. Unemployment benefit burden is expected to peak in 2009 after an increase in 2008, and to slow down slightly in 2010. It has been found that Latvia, Estonia and France are the ones more likely to suffer a higher public finance burden from the rise in immigrants´ unemployment. Other economies such as Germany, Finland, Spain, Ireland, Italy or Austria would also register a noticeable increase in their public burden although to a lesser extent.

This study has been funded by the Bureau of European Policy Advisers of the European Commission (2009).

This study is available in English only.

Author: FEDEA - Pablo Vazquez, Mario Alloza, Raquel Vegas and Stefano Bertozzi

Publication Date:
Thu 27 Jan 2011
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