Briefing Economic challenges and prospects of the refugee ...

1 BriefingDecember2015 EPRS | European ParliamentaryResearch ServiceAuthor:Cemal KarakasMembers' Research ServiceENPE challenges andprospectsof the refugee influxSUMMARYThe current refugee influx represents the largest population movement in Europesince World size and complexity make it difficult to draw conclusions on theeconomic challenges andprospects valid for each Member Stateof the EuropeanUnion (EU).Many experts agree that,in the short term,the refugee influx will lead torisingcosts,arising from the need to provide food, shelter and first longerterm, therefugee influxcouldbe positiveforthe European economyby,for example,addressingthe EU'salarming demographictrends.

2 Depending on theireducation,skills andwillingness to work, refugees might improvethe ratio of active workers and alsocontributeto innovation, entrepreneurship and GDP growth. Regarding the labourmarket, migrants can fill important niches both in fast-growing and declining sectors ofthe economy,and contribute to labour-market , migration and asylum policy is largely under the auspices of the MemberStatesand intergovernmental EU uncontrolled mass arrival ofrefugeeshashighlighted the different views in the MemberStateson migration andimmigration, driven by Economic ,socialand cultural divergencesandspurredthedebate on a new EU migration to the EuropeanParliament.

3 The EU and its Member States shouldtargetthepotential gains fromthecurrentinflux by, inter alia,successfuleconomic and socialintegrationof the this Briefing : Background The Economic effects ofmigrationin theory and practice A closer lookatdemography,refugeeeducationandempl oyment TheEU'smigration policy andresponse to thecurrentrefugeeinflux Outlook Main referencesEPRSE conomic challenges and prospects of the refugee influxMembers' Research ServicePage2of8 GlossaryDublin Regulation:establishes theprinciplethat only one EU Member State is responsible forexamining an asylum application.

4 The objective ofCouncil Regulation (EC) No 343/2003is toprevent abuse of the system by the submission of several asylum applications by / asylum-seeker / migrant: refugee is used to describe all beneficiaries of inter-national protection. UnderEU law, an asylum-seeker is a person who has applied for covers non-EU citizens who have their residence in an EU Member State for a periodof at least 12 Agreement:concerns the right of EU citizens (and others) to move across internalborders without checks, but also the duty of member states to manage the external borders oftheSchengen Schengenarea includes most EU Member States, plus Norway, Icelandand current refugee influx represents the largest population movement in Europe sincethe Second World War.

5 According to the European Asylum Support Office (EASO), inSeptember 2015 asylum applicationsin theEU+countries1rosefor the fifth consecutivemonth reachinga new record high withmore the wholeof 2014, the EU Member States received about 650000 asylum applications, whereastheEuropeanCommissionexpects1mill ionrefugee arrivalsin 2015, million in 2016andhalf a million in led to diverging views in the EUonhow to deal not onlywithborder controls andhumanitarianaid, but alsowiththesocial the CommissioninitslatestEconomicForecast(Au tumn 2015)

6 Saysthatthe influx could depending on the skills of the newarrivals moderatelyboostthe EUeconomy, someMember States remain refugeeshasalsoprovokeddebatesin Piketty, theauthor ofCapitalin the 21st Century,for instance,saysthatthe crisis represents anopportunity forEuropeto'kick-start the continent's economy'.Hans-Werner Sinn, oneof Germany sbest-knowneconomists,is less ,asmany of therefugees are low-skilled, the Economic challenges willoutweighthe effects of migrationin theoryand practiceThe mainstream argument in the debate on the currentarrivalof refugees is that in theshortterm, transit and destination countries willhavecosts arising from the need toprovide food, shelter and first aid to the mediumterm,destination countries also have to deal with processingasylumapplications and thecosts of social and Economic integration(includingsocial benefits.)

7 Healthcare,andcosts for education andoccupationaltraining).3In the long term,however, the refugee influx might be positiveforthe Europeaneconomy. The new migrants can play an important role in addressing Europe s alarmingdemographic trends, and depending on their skills and willingness to work improvethe ratio of active workersto non-activepersons( pensioners),whilstalsocontributing to innovation, entrepreneurship and GDP respect ofthe labourmarket, some experts argue that migrants can fill important niches both in fast-growingEPRSE conomic challenges and prospects of the refugee influxMembers' Research ServicePage3of8and declining sectors of the economy and contribute to labour-market flexibility.

8 Inaddition,young migrants areoften, like native-bornnon-migrants,considered to bebetter educated than those nearing retirement. Regarding the public purse, in the longrun migrants can contribute more in taxesand social contributions than they receive migrantshave the potential tomakeapositive impact on the public purse,withemploymentbeingthe most visible determinant of their net couple of empiricalstudieshavetried toassesstheeconomicimpact ofmigration,nonetheless theshortage of harmonised comparative data on international migration( by skills levels)

9 May distort the impact of migrationon Economic growth for 22countriesof theOrganisation for Economic Co-operation and Development(OECD) in the period1986-2006. Itconcludes there isa positive,but small impact of thenewhuman capital to the authors, the contribution of migrants to human capitalincreasetends to counteract the impact of population increase on capital per worker,but the net effect is small. An increase of 50% in net migration of foreign-bornpersonsgenerates less than one tenth of a percentagepoint variation in productivity 1 Fiscal contribution, benefitsand net contribution by migration status, 2007-2009 averageIn euros (PPP adjusted)

10 ContributionBenefitsNet contributionNativeMixedMigrantNativeMixe dMigrantNativeMixedMigrantSwitzerland19 85826 35320 1494 8894 9175 60114 96821 43714 549 Iceland18 97223 11712 3806 7015 5593 08712 27217 5589 292 Luxembourg20 04323 73220 46321 27016 50011 285-1 2287 2329 178 Italy15 34619 55212 31011 3667 4263 1623 98012 1269 148 United States15 52722 84413 1456 9935 6874 8718 53417 1588 274 Greece13 24616 0689 4768 2385 5571 7485 00810 5117 728 Spain10 51814 82010 0577 4124 9902 5613 1069 8307 496 Belgium18 85625 61113 7079 6978 7818 1479 15916 8305 560 Canada12 95921 16011 5185 4075 6666 3517 55215 4945 167 Norway17 38231 61312 36812 32711 2467 8635 05520 3664 505 Portugal8 02413 8548 3207 0744 0553 8419509 7994 479 UnitedKingdom11 50320 99010 8038 8999 0367 7742 60411 9543 029 Slovenia13 31614 09610 4918 86611 7287 4854 4502 3683 006 Netherlands21 17532 57612 41511 23611 2739 8719 94021 3032544 Denmark17 57426 42811 04110 2118 7158 6737 36217 7132 368 Austria16 70521 46512 33413 33015 0229 9803 3756 4432 353 Australia8 47612 3147 4474 7003 9615 1443 7768 3532303 Hungary6 5318 4666 6435 4506 5514 7791 0811 9151 864 Finland15 18819 9708 9429