The Long-Term Fiscal Impact of Immigrants in the Netherlands

The paper differentiates results by immigration motive. Only labour migrants who arrive before age 60 show a positive average lifetime net contribution — over €100,000 when arriving between ages 20 and 50. Every other motive (study, family, asylum, other) is negative regardless of arrival age; the paper's modelled cost is largest for asylum-motive immigrants (around €400,000 to age 70) and family-motive immigrants (around €200,000 to age 70).

Regional variation is wide. Across the 42 source regions the paper distinguishes, its baseline scenario ranges from –€606,000 per person (Horn of Africa and Sudan) to +€208,000 (Denmark, Sweden and Finland).

Outcomes for the second generation — people born in the Netherlands to immigrant parents — broadly track their parents' region of origin. The paper finds a positive average contribution for around a dozen regions, mostly in North-West Europe and East Asia, but a negative contribution for most others, with its most negative modelled outliers at –€480,000 (Morocco) and –€460,000 (Horn of Africa and Sudan).

The paper attributes most of this second-generation gap to labour-market outcomes rather than schooling. It reports that Dutch primary-school aptitude test scores (CITO) and the level of education ultimately attained for a given test score are similar between second-generation and native Dutch children from comparable socioeconomic backgrounds — the fiscal gap instead emerges later, in earnings.

The paper also reports a correlation between a source region's cultural distance from the Netherlands — measured using World Values Survey clusters — and net fiscal contribution, persisting after controlling for education level: a €201,000 gap for what it terms the "African-Islamic" cluster and a €79,000 gap for a broader set of clusters including Orthodox Europe, the Baltic states, Latin America and South Asia, both relative to a reference group of culturally closer regions (Protestant Europe, Catholic Europe, English-speaking countries and Confucian East Asia).

This is a single academic study, modelling one country using one methodology (discounted lifetime fiscal accounting, 2016 base year, Statistics Netherlands microdata and CPB projections) — not a UK statistic, not a cross-country comparison, and not necessarily transferable to the UK's immigration system, welfare state, or labour market.

Published as an IZA Discussion Paper (December 2024) — the series carries preliminary research circulated to encourage discussion, and the paper's own front matter states that opinions expressed are the authors', not IZA's institutional position.

The paper itself notes that the wider academic literature on the fiscal impact of immigration does not reach unanimous conclusions — citing differences in immigrant population composition, host-country labour markets and welfare rules, and methodology — and that most surveys put the overall fiscal effect within roughly plus or minus 1% of GDP.

The authors' own sensitivity analysis shows the ranking across regions is stable, but the size of the gaps changes depending on assumptions about the discount rate, state pension age, and how the cost of public goods is allocated across the population.