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The Impact of Immigration on UK Economy - Case Study Example

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This paper "The Impact of Immigration on UK Economy" discusses the figures for UK immigration for the past 10 years and how such a figure impacted the economic growth in the UK. The paper also deals with the argument for and against immigration as far as its impact on economic growth is concerned…
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The Impact of Immigration on UK Economy
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Download file to see previous pages Net migration has been a noteworthy factor in the UK`s population growth. The figures on immigration have been on the rise and are still expected to increase even in the near future. However, a million-dollar question is whether this net migration hinders or helps the UK economy. Graph 1 below shows the UK`s immigration statistics from 1991 to 2011, including the projected figures for 2012, 2013 and 2014.

The net migration into the UK was approximated to be 260,000 by the end of June 2014. This estimation was compared with the net migration of the previous year and it was found to be a 70% increase. In previous years, the UK`s population has been increased by the net migration of about 50,000 immigrants each year.

During this ten-year period, the labor force increased considerably since most immigrants were of working age such as students and people looking for jobs. They might have brought dependents, but in general, the net immigration caused the increase in the UK labor force, which in turn caused the potential output of the economy to increase as well. According to Eade & Valkanova (2009), the net inflows of immigrants can cause the aggregate demand to increase. He argues that immigrants increase aggregate spending in the economy. All factors held constant, net migration should make real GDP to increase. European immigrants who reached the UK since 200 contributed over £20 billion to the UK public finances (OECD, 2012). Furthermore, they have awarded the UK with creative human capital which would otherwise cost the country £6.8 billion in educating such human capital from within. According to the findings of OECD Economic Surveys (2008), from 2003 to 2012, European immigrants hailing from the EU-15 nations contributed 64 percent more in taxes compared to what they received as benefits. OECD (2013) found that immigrants originating from the East and Central European countries alone contributed 12 percent more compared to what they received. ...Download file to see next pagesRead More
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