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Immigrants boost growth but can cause tensions, IMF says

Immigration boosts economies but can cause social tensions and security concerns, the International Monetary Fund (IMF) said on Tuesday, at a time when high immigration levels are contentious in the U.S. and Europe.

A one percentage point increase in the share of migrants in the adult population could increase gross domestic product (GDP) per capita in host countries by around 2 percent in the long-run, the IMF said. GDP per capita is a measure of average income per person, so this would imply that long-standing citizens as well as newcomers gain from immigration. This occurs because in the long-term, immigration increases labor productivity, which in turn raises income levels, according to the IMF.


Immigrant advocacy members pray at the U.S.-Mexico border fence on May 1, 2016, in Tijuana.
John Moore | Getty Images
Immigrant advocacy members pray at the U.S.-Mexico border fence on May 1, 2016, in Tijuana.

"While high-skilled migrants contribute positively to host economies, lower-skilled migrant workers, too, can help raise productivity growth by, for example, allowing high-skilled local women go back to, or spend more time at work," the IMF said in a new report on Tuesday.

"Migration can also offer economic gains in terms of higher growth and productivity. In addition, migrants— predominantly of working age — can offer some relief for an aging population," it later added.

The number of international migrants reached 244 million in 2015 for the world as a whole, according to the United Nations (UN). That included almost 20 million refugees.

The UN noted that at least 10 percent of the total population of Europe and Northern America were migrants.

Immigration is in heightened focus in the European Union (EU), which has seen a surge in inbound refugees and migrants in the wake of the turmoil in Iraq and Syria. A desire for greater control of immigration numbers is viewed as one reason why the majority of Britons voted to quit the EU in June.

In the U.S., Republican presidential nominee Donald Trump has made combating unauthorized immigration a cornerstone of his campaign. His pledge to build a wall across the border with Mexico to keep informal migrants out has provoked the ire of the U.S.'s southerly neighbor.

Two-thirds of all international migrants were living in only 20 countries in 2015, according to the UN. The U.S. hosted 19 percent of all migrants, followed by Germany, Russia, Saudi Arabia, the United Kingdom, and the United Arab Emirates (UAE).

On Tuesday, the IMF said measures like improving immigrants' access to education and supporting their enterprises would help them obtain and keep jobs in host countries. Once in work, these migrants would pay taxes, which would help defray the short-run cost of fiscal support measures.

However, migration can cause problems for the countries of origin, the IMF warned.

"The departure of the young and the educated for better economic opportunities can take a toll on long term-growth. The loss of human capital translates into lower productivity, a worsening of skill composition, and dampened tax revenue," it said.

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