Immigration comes at hefty price PDF Print E-mail
Technology - Robot economics

Immigration comes at hefty price
30 March 2010
By Dirk Vlasblom

Turkish and Moroccan women take part in an integration course at Rotterdam's World Museum.
Photo Vincent Mentzel

Immigrants are expensive for Dutch society, but few people want to say it out loud for fear of the consequences, a study by a Dutch scientist has found.

The economic effects of immigration have become a hot-button issue in Dutch politics. The mere mention of the subject is often greeted with suspicion and loathing. But that didn’t stop scholar Jan van de Beek from writing his doctoral thesis on the issue. In his PhD research, which he defended at the University of Amsterdam on Tuesday, he answered two related questions: what kind of economic consequences did mass immigration to the Netherlands between 1960 and 2005 have, and why is it such a taboo to study the economic effects of these immigrants?

Van de Beek has come to conclusions the Netherlands may not like. Since the 1970s, little research has been done into the economic effects of immigration, for fear of playing into the hand of the xenophobic right. As recently as last year, populist politician Geert Wilders asked the Dutch cabinet to calculate the net costs or benefits imposed on society by immigrants. Cabinet refused to do so, which led to uproar amongst several opposition parties. The minister responsible called it “improper” to reduce citizens’ contribution to society “to a profit-loss analysis”.

The reluctance to study the matter has done well to conceal some unpleasant facts, Van de Beek claims. For one, the Dutch policy of recruiting workers from outside of Europe in the 1960s needlessly delayed the modernisation of Dutch industry. As the Dutch economy was modernised in the 1980s, many immigrants were laid off and became dependent on welfare. Even today, the Dutch welfare state mainly attracts immigrants that impose a net cost on the Dutch economy, Van de Beek found.

Van de Beek is a mathematician and a cultural anthropologist. He is interested in social problems and has a soft spot for numbers. “In 1999, I was writing my master’s thesis about Dutch asylum policy,” he said in an interview. “I wanted to devote a chapter to the economic aspects of the matter, because the asylum debate centres mostly on numbers. To my surprise, I couldn’t find any sources. Filling this gap became the subject of my doctoral research.”

43,000 euros per immigrant

Since then, some other researchers have ventured into the area. In the same year Van de Beek wrote his thesis, economist Pieter Lakeman estimated that immigrants cost the Dutch state 5.9 billion euros each year. An analysis by a Dutch government agency in 2003 found that an immigrant who arrives here at age 25 costs Dutch society 43,000 euros over the rest of his lifetime on average.

For his PhD, Van de Beek studied all research published on migratory economics since 1960. He interviewed scholars about their attempts to investigate the economic consequences of immigration and spoke to (former) politicians about the motives underlying immigration policy. He also tried to answer the question of why prominent Dutch government think tanks had so little to say about the matter.

The title of his dissertation became Knowledge, Power and Morality. “Morality stands for Dutch political correctness, but that is a term I chose not to use,” Van de Beek said. “I prefer the term ‘moral reading’: the phenomenon that knowledge is not judged according to its factual merit, but according to its social, political and moral consequences.

“In the 1980s and 1990s people in the Netherlands feared the rise of the radical-right,” he explained. In 1983 the Centrumpartij (CP) garnered nine percent of the votes in Almere’s municipal election. The party opposed immigration and was later banned for inciting racism and hatred. “This shocked the Netherlands,” Van de Beek said. “The Second World War was still the moral frame of reference. We were not allowed to know the true cost of immigration because this could play into the CP’s hands. This left a huge gap in our body of knowledge.”

An economic disaster

“The recruitment of labourers in the 1960s”, Van de Beek said, “was an economic disaster. The stated intent here was to keep wages down, but we would have been better served by letting them rise. The switch from an industrial economy to one dependent on capital was inevitable for us to be competitive internationally. It would have been best to make that change in the 1960s, when the economy was booming. Finally, we had to restructure the economy anyway and many of the immigrants who came here in the 1960s were laid off in the 1970s and 1980s and ended up on benefits.”

Immigration remained an expensive issue long thereafter. In the Netherlands, the state redistributes a lot of money. “The government loses money on its less well-educated citizens. They contribute less in taxes and other payments over the course of their lives than they receive in the form of subsidised healthcare, education, benefits and pensions. This means there is little point for the Netherlands to try to attract uneducated labour from abroad.”

Van de Beek recalled a report about immigration published in 2001 by a Dutch government think tank. Harry van Dalen, a Dutch economist who was asked to contribute a chapter regarding its economic effects, met with resistance when he tried to discuss the tension between immigration and the welfare state. “A fundamental problem,” Van de Beek said. “But the project group wouldn’t hear of it. Other members feared such an analysis would lead to immigrants being blamed for reform of the welfare state.”

Van de Beek shares Van Dalen’s analysis. “A welfare state leads to a levelling of income. This makes it relatively unattractive for an Indian IT specialist to come to the Netherlands, because the educated earn relatively little here. He would prefer to move to the United States. The Netherlands attracts fewer educated immigrants, unlike Canada or Australia. Those countries recruit much more actively and have a selective admission policy. They put national interests first. That serves both the host nation and immigrants better, because it means they are welcome and will thrive.”

Source: NRC Netherlands.

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