Borderless Welfare State

Overview

This report investigates the fiscal impact of immigration on the Dutch welfare system between 1995 and 2019. According to the study, immigration during this period resulted in a cumulative net cost of €400 billion to the Netherlands. This figure is comparable to the country's total natural gas revenue earned since the 1960s. In recent years, the annual burden of immigration on public finances has been estimated at €27 billion, with projections suggesting this could rise to €50 billion per year by 2040 if current patterns persist.

Contribution by Immigration Type

The fiscal contribution of migrants varies significantly depending on their migration category. Labour migrants contribute positively, with an average net lifetime contribution of €125,000 per person. In contrast, study migrants cost the state an average of €75,000, family migrants €275,000, and asylum seekers €475,000 per person over their lifetimes.

Contribution by Region of Origin

The report also highlights disparities in fiscal impact based on migrants' regions of origin. Western migrants provide a small net gain of approximately €25,000 per person. Non-Western migrants, on the other hand, are associated with an average net cost of €275,000 each. The fiscal burden is especially high among migrants from Morocco and the Horn of Africa, where average costs reach as much as €600,000 per person. By contrast, migrants from Japan, North America, and Oceania contribute positively, averaging €200,000 per person.

Long-Term Demographic Impact

The study argues that immigration cannot provide a sustainable solution to the Netherlands’ aging population. To preserve the current dependency ratio, the national population would need to grow to nearly 100 million by the year 2100. However, fertility rates among immigrants tend to converge with those of the native population over time, limiting immigration’s long-term demographic effect.

Second-Generation Outcomes

Second-generation immigrants show improvement in educational attainment and labor participation, but they still represent a net cost to public finances. A notable metric from the study is the correlation between education and fiscal impact: each additional point scored on the Dutch Cito test is linked to a €20,000 increase in projected lifetime fiscal contribution.

Policy Recommendations

To reduce the fiscal strain on the welfare system, the report recommends a shift toward a more selective immigration policy, prioritizing high-skilled migrants. Without structural reforms, the continued growth in immigration—particularly from low-contributing groups—could undermine the long-term sustainability of the Dutch welfare state.

Authors

Jan H. van de Beek
Hans Roodenburg
Joop Hartog
Gerrit W. Kreffer

Publication Details

Published by Demo-Demo Publisher, Zeist, Netherlands
ISBN: 9789083334820

References
\[\[Download full report (PDF)>>/pdfs/borderless\_welfare\_state-2-1.pdf]]

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