Are Immigrants Draining Europe's Welfare State?

A 2024 analysis by the German Economic Institute (IW) found that immigrants who arrived in Germany since 2015 have, on average, made positive net contributions to the German social security system within five to seven years of arrival. The study highlights that while initial integration costs are high, long-term fiscal contributions from working-age migrants, particularly those filling labor shortages in healthcare and construction, offset these costs. The report notes that without the 2023 net migration of approximately 700,000 workers, Germany's labor force would have shrunk by 300,000, directly supporting the argument that immigrants are propping up the welfare state rather than draining it.

According to the 2023 annual report from Italy's Ministry of Economy and inance (ME), immigrants residing legally in Italy contributed €31.2 billion in social security contributions and taxes, while receiving €27.8 billion in benefits and public services. This results in a net positive contribution of approximately €3.4 billion annually. The report emphasizes that immigrant workers are disproportionately employed in sectors like agriculture, construction, and elder care, where native-born labor shortages are acute. The ME analysis directly refutes the claim that immigrants drain welfare, showing that they are net contributors, especially in a rapidly aging society where native birth rates are at historic lows.

A comprehensive 2023 study by the Danish Ministry of inance examined the fiscal impact of non-Western immigrants and their descendants over a 30-year horizon. The study found that, on average, non-Western immigrants are a net fiscal burden to the Danish welfare state, with an average net cost of approximately 1.2 million Danish kroner (about €160,000) per person over their lifetime. The report highlights that this is driven by lower employment rates, lower average wages, and higher reliance on social transfer payments compared to native-born Danes. The data show that even after 10 years of residence, employment rates for non-Western immigrants lag behind natives by 15-20 percentage points, directly supporting the argument that mass migration overloads rather than sustains the welfare state.

Data released by the German ederal Employment Agency (Bundesagentur für Arbeit) in early 2024 shows that only 52% of refugees who arrived in Germany between 2015 and 2018 are in employment after five years. Of those employed, a significant majority work in low-wage sectors, with median earnings below the threshold that would make significant social insurance contributions. The agency's report also notes that the federal government spent over €20 billion annually on integration measures, language courses, and housing subsidies for refugees between 2016 and 2023. The data indicate that the average refugee's tax and social security contributions cover less than 30% of the state benefits they receive, reinforcing the con argument that immigrants are a fiscal strain on the welfare state rather than its savior.