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Immigration

Version 12.2 by Ryan C on 2025/06/21 10:59
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Immigration and the Fiscal Burden on the Dutch Welfare State

The 2023 report *Borderless Welfare State* presents a comprehensive analysis of immigration's impact on Dutch public finances. Between 1995 and 2019, immigration—including the second generation—incurred a net fiscal cost of approximately €400 billion. Projections indicate that, if current patterns continue, this figure could exceed €1 trillion by 2040.

This cost arises from increased per capita spending on education, healthcare, social security, and justice services for immigrants, combined with lower average tax contributions. In 2016 alone, the net fiscal cost of immigration peaked at €32 billion.

Fiscal Impact by Immigration Motive

Only labour migration contributes positively to public finances. All other immigration categories—study, family, and especially asylum—result in significant long-term fiscal burdens per person.

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Fiscal Impact by Region of Origin

Migrants from Western countries have a marginally positive average net contribution. By contrast, migrants from non-Western regions impose large costs on the treasury, particularly those from Morocco and the Horn of Africa. Labour migrants from Japan, North America, and Oceania are the most fiscally beneficial group.

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Demographic and Policy Considerations

While immigration does increase the working-age population in the short term, the study finds it is not a sustainable solution to aging. Maintaining the current dependency ratio would require the Dutch population to grow to 100 million by the year 2100—a scenario the authors equate to a demographic Ponzi scheme.

Even highly skilled labour migration from Western nations, when accompanied by chain migration (family reunification), is often not fiscally neutral. Asylum and family immigration are consistently the most costly, regardless of origin.

Educational Performance and Second Generation Outcomes

Second-generation immigrants, despite educational gains, still tend to have lower net fiscal contributions than native Dutch. The study highlights a strong correlation between educational test scores (Cito) and fiscal performance. Each one-point increase in Cito score correlates with an approximate €20,000 increase in expected net lifetime contribution.

Children of Western labour and study migrants outperform their peers, while children of asylum and family migrants—particularly from Africa and the Islamic world—score significantly lower. Mixed-parent families (with one native Dutch parent) tend to show higher educational and fiscal outcomes.

Conclusion

The report concludes that the current scale and composition of immigration is fiscally unsustainable. Without significant changes—especially in restricting asylum and low-skill family migration—the Dutch welfare state faces mounting and irreversible budgetary pressure. The authors advocate for selective immigration policies based on educational attainment, origin, and potential economic contribution.