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New study estimates the net public cost of refugee immigration in Sweden

News: Feb 23, 2015

Refugee immigration per capita in Sweden has been Europe’s largest for thirty years, and almost ten times above the European average over the last ten years. In a new report released today, economist Joakim Ruist calculates how this has impacted on Swedish public finances. The estimated annual net cost corresponds to slightly more than 1 per cent of GDP.

In this study from the School of Business, Economics and Law at the University of Gothenburg, Joakim Ruist has estimated Swedish public revenues and costs relating to individuals who arrived in the country as refugees or their relatives. According to the results, the redistribution through public finances from the rest of the Swedish population to the refugee population reached 1 per cent of GDP in 2007 and is likely to be somewhere around 1.35 per cent of GDP in 2015. The main reason why refugee immigration implies a net cost is refugees’ low employment levels and hence tax payments.

- It is important to point out that refugee immigration is allowed for humanitarian reasons and hence it must also be allowed to cost money. Yet it is important to know approximately the size of this cost, since eventually it is covered by cutting down on other public expenditure, says Joakim Ruist.

If all of Western Europe had been at Swedish refugee immigration per capita levels over the last ten years, the total refugee immigration in the region would have been nearly 6 million individuals rather than the actual 740,000. The global stock of international refugees would then have been about 30 per cent lower than it is today.

- Economic costs are a major reason why other countries do not make an effort to achieve a more even distribution of refugee immigration in Europe today. Against this background, my results indicate that the costs implied in helping a substantial share of those in need of assistance would be significant, yet manageable, says Ruist.

The report “Refugee immigration and public finances in Sweden” can be downloaded from http://hdl.handle.net/2077/38323

For more information, please contact: Joakim Ruist, Research Fellow, Department of Economics, School of Business, Economics and Law at the University of Gothenburg, joakim.ruist@economics.gu.se, +46 31 786 2915 (office phone), +46 703 96 77 31 (cell phone)

 

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031-786 13 49

Originally published on: economics.handels.gu.se

Page Manager: Maria Norrström|Last update: 9/6/2017
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