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Long Reads

The Real Economics of Migration

Throughout the West, populists and nationalists have hijacked the migration debate by framing the issue solely in terms of cultural identity. Their strategy, while often electorally successful, is laying a foundation for weaker growth and higher levels of inequality across the world’s aging advanced economies.

OXFORD – Debates about immigration are roiling the world’s democracies. In the run-up to the US midterm elections this year, President Donald Trump sought to rally his base by making an issue out of a “caravan” of impoverished Central Americans making its way on foot to the southern border. In the United Kingdom, warnings of imminent mass immigration of Turkish people contributed to the June 2016 vote in favor of leaving the European Union. In Italy, Hungary, Austria, and elsewhere, populists have tightened their grip on power by politicizing flows of migrants and asylum seekers from the Middle East and North Africa. And, in Germany, Friedrich Merz, a Christian Democrat who hopes to succeed Chancellor Angela Merkel, recently questioned whether the right to asylum should remain enshrined in Germany’s post-war constitution.

Though the situation differs from country to country, refugees have increasingly become synonymous with economic migrants, and both have taken center stage in heated debates about national identity and personal values. But, even though migration has had significant macroeconomic effects across many OECD countries in recent years, nowhere has the political struggle proved amenable to cool-headed analysis of migrants’ actual economic role in Western democracies.

The more immigration becomes central to a broader cultural politics, the more likely it is that policy responses will be driven by non-economic considerations. The results may be disruptive, threatening economic growth and, in turn, risking further political discontent.

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