2004 December 21 Tuesday
Economic Study Finds Immigrants In Holland Net Burden

Many immigrants are a net economic burden in the Netherlands.

Immigration and the Dutch economy

  1. The Netherlands Bureau for Economic Policy Analysis, part of the Ministry of Economic Affairs[1], has produced a wide-ranging study of the impact of immigration on the economy of the Netherlands. The web site is www.cpb.nl
  2. The main results confirm findings in the US, Canada, and the UK that the benefit of large scale immigration to the resident population is very small and can sometimes be negative.
  3. Main results

    The study, published in June 2003, concluded that immigration of labour has the following effects:

    1. the gross domestic product will increase, but this increase will accrue largely to the immigrants in the form of wages;
    2. the overall net gain in income of residents is likely to be small and maybe even negative;
    3. the amount of redistribution between residents is substantial;
    4. the more the skill distribution of immigrants differs from that of residents, the larger the amount of redistribution will be;
    5. residents will skills comparable to those of immigrants will lose;
    6. residents will skills complementary to those of immigrants will win in the long run;
    7. capital owners will win in the short run, but in the long run their gains will disappear;
    8. due to labour market imperfections, part of the income effect for resident workers will be replaced by employment effects (unemployment instead of a wage decrease).

Note the language here. The writer says that immigrants who are like the average Dutch immigrants are a burden. This is a rather indirect way of stating that the average Dutch immigrant is an economic burden.

For all entry ages, however, immigrants turn out to be a burden to the public budget if their social and economic characteristics correspond to those of the present average non-Western resident. Accordingly, budget balances are affected negatively.

So net economic effect of immigrants on the native Dutch in Holland is negative. So immigration's net effect in Holland is similar to its net effect in the United States.

The report concludes that the current mix of immigrants to the Netherlands is not a solution to the financial problems caused by their aging population:

The results indicate that immigration cannot offer a major contribution to alleviate public finances and thus become a compensating factor for the rising costs for government due to the ageing of the population.

The report also acknowledges environmental costs.

The further population density increases, the more economies of scale are likely to be outweighed by negative external effects related to such phenomena as traffic congestion, pollution, and loss of open space, landscape and nature.

One aspect of environmental costs that is not widely appreciated is that the cost of pollution reduction per person goes up as population increases. Why? Because in a less dense population less emissions reduction is needed per person. Imagine that there were only 300 million people in the world. They could all be living at US standards of living but would not require as much spent per person on air or water pollution reduction because their pollution would be spread out so widely and also just not add up to all that much.

Imagine you live in a city with 2 million people and in order to make the air healthy enough to breathe 95% of the emissions from cars and factories has to be caught and broken down or converted to safe form. Then imagine 2 million more people move to that city and engage in just as much economic activity as the original 2 million. Well, in order to keep total pollution at the same acceptable level 97.5% of all pollution must by captured and converted to safe substances. The cost of each additional 1% reduction in pollution is not linear. Each additional percentage is much more expensive to stop. At the extreme the cost of stopping 100% of all pollution would be prohibitive and would require a huge reduction in living standards. So population increases impose not just crowding and higher prices per unit of housing but also much higher pollution control costs.

The original Dutch report is available here (in PDF format).

Share |      By Randall Parker at 2004 December 21 02:24 PM  Immigration Economics

PacRim Jim said at December 21, 2004 2:55 PM:

It's a mistake to think that the first generation of immigrants will contribute much to a country. It's their descendents who will. The first generation hangs on with their fingernails while their children climb their backs to safety. What more could be expected or asked?

Randall Parker said at December 21, 2004 3:11 PM:

PacRim Jim,

Whether later generations will contribute depends on the group. Hispanics in later generations do not rise in academic achievement. So a larger lower class caused by immigration is going to be with us for generations to come.

Kurt said at December 21, 2004 3:53 PM:

PacRim Jim,

What you say is correct about the Asian immigrants to the U.S. They tend to create silicon valleys. Unfortunately, the hispanic immigrants as well as immigrants from many other places in the world tend not to do so well. They tend to create barrios. The problem with Europe is that they do not attract the high IQ, high education oriented East Asians. This is probably due to the fact that most European countries are not free market and have much regulation of business activity. This reduces the amount of economic mobility that is needed to attract the East Asian immigrants that our silicon valley type areas tend to attract. Hense, Europe ends up with the low skill immigrants from the muslim and other countries nearby Europe.

One proposal I have never seen mentioned here is for Europe to liberalize its economy, then allow lots and lots of Chinese, Koreans, and other East Asian types to immigrate to Europe. A large influx of Chinese would help to offset the influence of muslims in Europe as well as to stoke the economic fires necessary to support all of those aging white Europeans who expect to retire in comfort.

Europe as part of a greater China is far more appealing to me than Eurabia.

Donald said at December 21, 2004 5:40 PM:

the main restriction also needs to be put on the foreign religious imposition put on these historical communities. In other words, I would make the regulations for opening and maintaining mosques to the point that it would seem 'all but impossible' for them to pay the fees, taxes etc. This would make these foreigners realizer thay have to conform - or leave. Notice I didn't say accept Chrisitianity or anything else. If you wish - say "we are happy atheists and this is our home and we're not leaving - take your mosque and shove it - back to the sands of arabia".

Commenter said at December 21, 2004 6:32 PM:

And northeast asians assimilate much better. And they have a more capatible culture. These last two points are a bare minimum considering that you are going to be worse off due to ethnic nepotism. Also, they have closer birth rates to europeans, helping easy ethnic tensions relative to what you would have with arabs. And more would probably want to move back (they have ethnic nepotism too), maybe not a whole lot, but more than arabs since northeast Asia is going to probably grow more rapidly economically than the Middle East.

Commenter said at December 21, 2004 6:38 PM:

I'm always reading back my messages and finding spelling mistakes. need to hold back on that post button :)

John S Bolton said at December 21, 2004 8:16 PM:

In Europe, it is well known that those who would be called immigrants here, asylum-seekers, relatives of guest workers, and so on, are on net public subsidy. In America, we are given propaganda to the effect that immigrants are workers ('just here to work'), as if being a worker and being on net public subsidy were mutually exclusive categories. What is of utmost importance to recall, on this subject, is that being on net public subsidy means receiving the proceeds of aggression. The net taxpayer is a victim of aggression, to which the foreigner on net public subsidy is accessory. To be openhanded with the proceeds of aggression is vicious, not a sort of admirable generosity. When aggression is used to support public expenditures, any morality worthy of the name, requires that this aggression be minimized. Therefore, immigration of those unlikely to be net taxpayers is immoral; it increases the aggression which we ought always to seek to make smaller.

PacRim Jim said at December 22, 2004 1:39 AM:

Germans, Italians, Poles, Chinese, Jews, Greeks, Japanese, Russians,...in fact, every relatively recent wave of Americans took time to assimilate and contribute. I've worked in Silicon Valley and have seen second- and third-generation Mexican-Americans in engineering cubicles at Intel and elsewhere. Don't tell me they won't contribute. Sure, some, maybe many, Mexicans are here to scam the system, and sure, we need more immigrants with smarts, but the brutal fact is that, without substantial immigration, America's demographics would lead to a shrinking population. Some rational and beneficial balance must be found between the number and intelligence of immigrants.

Kenelm Digby said at December 22, 2004 2:19 AM:

All this rather flies in the face of the guff that we are fed day in day out by those who should no better that third world immigrants "create" wealth and are "Europe's salvation" in the face of population decline.

Randall Parker said at December 22, 2004 11:29 AM:

PacRim Jim,

You will find orders of magnitude more East and South Asians in cubicles in companies like Intel. I've worked in cubicle land in engineering companies and met very few Hispanics therein. This, in spite of the fact that Hispanics are far more numerous in California than those other groups.

No, not every recent wave took time to assimilate. First and second generation Vietnamese got into Stanford without racial preferences. Koreans do very well in the first and second generation. So do Japanese and Taiwanese.

The politically correct national myth about immigration is flat out wrong when looked at empirically. The different groups have hugely different economic outcomes that last for many generations and even indefinitely.


Our liberal elites talk bullshit. They just plain flat out make up pretty-sounding myths and then peddle the myths to the gullible. I am sick of the lies.

Donald said at December 23, 2004 2:33 PM:

this scenario is very much like the dilema that the US 'social security' program is facing. The ratio of workers supporting retirees will reverse soon to more people waiting for their checks than can actually support them. That was one of the main reasons both parties accept complicity in allowing millions into the country - with the hope that they can relieve that burden alone. Besides the fact that Americans are too proud to work the fields and slaughterhouses etc. This idea that population explosion is neccessary just to allow more and more taxes for the govt's wasteful programs to continue is a very diabolically demented idea! They need to really re-think this approach to civilization.

HABIBUL WAHAB said at February 15, 2006 2:13 AM:

respected sir
my name is habibul wahab.i live in malakand payeen disttrict dir lower N.W.F.P pakistan.
my qualification is B.SC(2 YEARS).i also have computer background(MCSE course,and office).
i have worked as a teacher in public high school for
more then three years.
now i want to migrate and study in holland.
it is my dream to live in holland.because holland is
a beautiful country of the world.i have great interest to immigrate to holland.
please help me and guide me.
i will be great thankfull to you.
thanks a lot.
good bye.

Thanos Valkanos said at January 16, 2008 1:15 AM:

Dear all,

All or most of the western world, faces the same problem, aging population and pension scheme collapse. What is needed for that, are not small numbers of highly educated Immigrants who will occupy highly paid positions with a large pension plan, but a strong vibrant working force, who will do the most necessary works (construction, services, etc), will lift the GDP, and most of all bring back industry, exporting force, and ideally (if well paid and treated well enough to accumulate to the main population)a new generation of Americans, Dutch, Germans, Brits etc.
I urge u to see the countries who succeeded the most in this. In Europe Britain and Germany, who have accumulated vast amounts of population, who are now integrated much better, in Greece also the Russians (despite the early results) are adapting very well, as of course are the Turks which are very much alike us (the Greeks), as for the Albanians and people from FYROM, are not coping as well. On the other hand, over flexible (in my opinion)policy of the Dutch, has resulted to a large, strongly diversified subgroups, who in entering the vastly different environment of free sex, free drugs,of Holland are clustering whilst accumulating. This resulted, among others, to an religious-nationalist uprise from the dutch , who are tired of seeing home full of guests and they just want them to go, so that they may have a spliff, a cup of tea and go to bed...

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