Immigrants From Eastern Europe Pay 12% More In Taxes Than They Receive In Benefits

05/11/2014 07:47 | Updated 05 November 2014

Immigrants from Eastern Europe contributed £5 billion to the UK economy over an 11-year period, according to new research data.

The research showed immigrants who arrived between 2000 and 2011 from ten central and East European countries paid 12% more money to the public purse in taxes than they received in benefits.

They made a positive contribution of around £5 billion, and were also better educated than native Brits, with an average of 25% of immigrants having a degree while the UK native average was 24%.

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European immigrants give more to the UK economy than than they receive

The research from the UCL Centre for Research and Analysis of Migration (CReAM), also found Eastern and Central European immigrants were more likely to be employed than UK natives: at 81% whereas an average of 70% of UK natives were employed.

The new data covers immigrants from ten ‘accession’ countries, known as the ‘A10’, which joined the European Union after 2004, including Romania, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia.

It does not take into account the period from January 2014, when migration restrictions for people from Romania and Bulgaria were lifted, allowing them to work without restrictions across the European Union.


The conclusions are in sharp contrast to the views of some politicians, who warn of the "uncontrolled" influx of migrants.

Ukip leader Nigel Farage said this week that that Britain has become "the cheap labour economy of the European Union" and that it was fair to cut benefits available to EU migrants coming to Britain. He also suggested Britain should refuse to accept any immigrants with a "serious life-threatening illness or a serious criminal record".

Prime Minister David Cameron is under pressure to curb immigration, and is considering plans stretch the EU rules "to their limits" to ban migrants who do not have job and to deport those who are unable to support themselves after three months. German Chancellor Angela Merkel has warned that his plans risk be ousted from the union altogether.

European immigrants from the EU-15 countries, the original 15 in the EU including France, Germany, Ireland, Italy and Spain - contributed even more than Eastern and Central European immigrants, giving back an average of 64% more to the public purse than they received.

The research brings a new level of detail to findings from CReAM last year, which revealed that EU immigrants paid more in taxes than they received in benefits, and are better educated than Brits.

It showed that European Union immigrants from all countries contributed a positive figure of £20 billion between 2001 and 2011.

Immigrants from any country who arrived since 2000 were 43% less likely than natives to receive state benefits or tax credits. They were also 7% less likely to live in social housing.

The authors of this reports have said they debunk portrayals of immigrants as "benefit tourists" with no intention of working as unfounded.

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The reports authors say the idea of benefit tourists is wrong

62% of those from EU-15 countries such as France and Germany had a university degree, against the 24% figure for UK natives.

In fact, immigrants educated in the countries they came from brought £6.8 billion worth of education value to the UK between 2000 and 2011.

Of all immigrants who were living in the UK between 1995 and 2011, European Economic Area immigrants contributed 10% more than UK natives, while non-EEA immigrants from countries like India and Pakistan made contributions of almost 9% lower than the amount they paid in. In the same period the UK's total balance was a negative £591 billion.

Professor Christian Dustmann, Director of CReAM and a co-author of the study, said: “A key concern in the public debate on migration is whether immigrants contribute their fair share to the tax and welfare systems. Our new analysis draws a positive picture of the overall fiscal contribution made by recent immigrant cohorts, particularly of immigrants arriving from the EU.

“Responding to comments on our earlier report on this topic published last year, we performed extensive sensitivity analysis, which does not alter our main conclusions: immigration to the UK since 2000 has been of substantial net fiscal benefit, with immigrants contributing more than they have received in benefits and transfers. This is true for immigrants from Central and Eastern Europe as well as the rest of the EU."

“European immigrants, particularly, both from the new accession countries and the rest of the European Union, make the most substantial contributions. This is mainly down to their higher average labour market participation compared with natives and their lower receipt of welfare benefits.”

CReAM is an independent and interdisciplinary research centre within University College London's economics division.

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