Immigration boosts OECD productivity, ECB forum study finds
A study ahead of next week's ECB forum shows immigration has driven up to a third of worker productivity growth in major European economies, challenging rising anti-immigration political sentiment.
Research slated for the ECB Forum on Central Banking in Sintra has found that high immigration rates over the past three decades have significantly boosted economic growth and labour productivity across wealthy nations. The paper, authored by University of California, Davis professor Giovanni Peri, directly contradicts the core economic arguments of surging anti-immigrant parties in countries like Germany and Britain.
The macroeconomic stakes are substantial for a continent facing a structural workforce decline. The total number of immigrants arriving in OECD countries from outside the bloc surged to roughly 100 million in 2024, up from 25 million in 1990. This influx has arrived just as native population growth turned negative across many European economies, preventing a deeper demographic crisis.
Analysing data from across the developed world, the study quantified the exact economic premium of these arrivals. An increase in immigrants equal to 1% of a host country's population drives a 1.2% increase in GDP per worker growth within five years, rising to 1.9% over a decade. "Receiving countries' labour productivity grew significantly during and after periods of higher immigration rates," Peri wrote.
The impact on major European markets has been decisive. The research attributes roughly a third of worker productivity growth in Spain, Italy and Britain since 1990 directly to immigration. In Spain, a 15 percentage point increase in the adult immigrant share correlated with a 28% higher growth rate in GDP per worker, accounting for a third of the actual 75% expansion achieved. In the UK, a 10 percentage point rise in the immigrant population share drove 19% of the country's 60% increase in GDP per person.
For companies and investors, the study highlights that immigration acts as a catalyst for capital expenditure rather than merely a labour supply shock. "A significant portion of such growth in GDP per worker is realized through strong growth in investments," the paper noted. Looking at the high foreign-born populations in Canada and Australia, the authors concluded that wealthy nations still have ample room to absorb more workers without eroding those positive returns.
