Calculating the Cost of Cultural Enrichment in the Netherlands

“The second generation of non-Western immigrants makes greater use of collective provisions and contributes less in taxes and social security premiums than the average citizen.”

Last year Geert Wilders asked the Dutch government to prepare a cost-benefit analysis of immigration into the Netherlands, so that voters could make an informed decision about whether mass immigration from the Third World should be halted. The government refused his request, so his party commissioned a report from NYFER, a private research firm, to assess the overall net cost of immigration.

As Mr. Wilders mentioned in his speech last week, the results are in, and the report has been published. The full NYFER report (in Dutch, pdf) is available online, and the conclusions (in Dutch, pdf) have also been posted.

Our Flemish correspondent VH has kindly translated NYFER’s conclusions for Gates of Vienna. It’s easy to see why the Dutch government was reluctant to look into the matter: for the last ten years, the net cost of immigration to the Netherlands has been €7.2 billion annually.

Below is the PVV’s introduction to the report, followed by the entire text of the conclusions as reported by NYFER and published by the Party for Freedom:

10 years’ immigration in the Netherlands costs 72 billion euros

The Dutch government [the Balkenende Cabinet] refused last year to investigate the cost of mass immigration at the request of the PVV fraction. The research institute NYFER has now conducted this study, as commissioned by the PVV. The results are shocking. The Party for Freedom is pleased that the taxpayers will finally get what they are entitled to: insight into what happens with their money.

On a net migration of 25,000 non-Western immigrants per year, with an equal number of offspring, our society loses €7.2 billion [$8.8 billion] a year. Ten years of unchanged immigration policy therefore means running up a tab that eventually costs the society 72 billion euros [$8.8 billion]. Compared to natives, non-Western immigrants pay less on net taxes and premiums, are more dependent on government benefits (including social security benefits) and are more often involved in crime with all its associated costs.

PVV faction leader Geert Wilders: “The fact that mass immigration is also disastrous from a financial standpoint confirms the need for the actions the Party for Freedom recommends, such as a halt to immigration from Muslim countries, a reduction of the remaining migration and asylum flows, and the exclusion of new immigrants from social security benefits for a period of ten years.”

Most important conclusions of the NYFER report:

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• Non-Western immigrants make greater use of public goods and contribute less on taxes and social security than the average resident of the Netherlands. The result therefore is a negative net contribution to public finances. When income and expenses over the course of a lifetime are calculated, each non-Western immigrant between 25 and 35 years of age costs the public sector between €40,000 and € 50,000 [$49,000 to $61,000]. At other ages, the cost are higher. This is the approximate cost of an ‘average’ non-Western immigrant with socio-economic characteristics that match those of the current population of non-Western immigrants.
  
• These costs are incurred because non-Western immigrants more likely than average to rely on disability benefits, unemployment, and social security benefits. They also make a greater use of [health] care, and in addition their overrepresentation in crime is causing extra costs. Equally important are greater expenditures on housing benefits. In contrast, they make less use of child care and of higher vocational and university education. Immigrants also often have an incomplete state pension [which builds up with 2% per year from the age of 15 until 65; immigrants who arrive when older than that will not be able to build up the full 100% — translator].
  
• The costs are highly dependent on (1) the age of entry, (2) socio-economic characteristics that determine the chances of employment, (3) the progress of integration, particularly as it effects participation in employment, and (4) the duration of stay, respective to the extent to which return migration takes place to the country of origin.
  
• For a complete assessment of the budgetary impact of immigration one should not only consider the net contribution of first-generation non-Western immigrants (the immigrants themselves), but also those of the second generation (the offspring of the first generation). The second generation of non-Western immigrants makes greater use of collective provisions and contributes less in taxes and social security premiums than the average citizen. Measured by their participation in the labor market (net participation rate), the second generation on average makes up 38% of the backlog generated by their parents in comparison with the average resident of the Netherlands.
  
• With an annual immigration of a net 25,000 non-Western immigrants and an annual increase of 25,000 descendants, the costs for the public sector are € 7.2 billion [circa $8.8 billion] per year (in 2008 euros). In this connection, it is again assumed that the use of public services and the contributions to taxes and premiums match those of the current population of non-Western immigrants, and that the second generation makes up 38% of the socio-economic backlog.
  
• When more immigrants to return to their country of origin (58% instead of the present 46%), for example because a higher proportion of immigrants consists of students or others who stay temporarily in the Netherlands, the public costs are reduced by € 0.5 billion [$0.6 billion]. When the chance of return migration is halved (to 23%), for example because there is more often a matter of family formation or family reunification, the cost for the public sector increases by €0.9 billion [$1 billion].
  
• An improved integration of second-generation non-Western immigrants reduces the costs for the public sector. When the second generation makes up the socio-economic backlog by 50% instead of the present 38%, that saves the Treasury structurally €0.6 billion [$0.97 billion] per year.
  
• The Netherlands has too long upheld the idea that immigrants would stay only temporarily in the Netherlands, and the impact of continued migration has been underestimated. There also is no selective admission policy, such as in many other countries. Additionally, the relatively extensive social services have contributed to unskilled or low skilled migrants coming to the Netherlands. Partly also because of this, the Netherlands — together with several other European countries — belongs to the group of countries where the employment participation of immigrants lags behind at a relatively high rate compared to that of the indigenous population. Consequently, the costs to the public sector are higher than in many other countries.

VH adds:

The full report has some interesting additional material. For example, it mentions that immigrants who intermarry with natives have a much better ratio of contribution to the socio-economic sphere as well as to society in general than those who don’t (such as non-Western immigrants from Muslim countries). This is an interesting matter, considering that Muslims predominantly intermarry within their own religious group (local or imported), and at best exclude non-Muslims from their social contacts — even worse is when they are hostile towards the natives.

The complete report on the budgetary impact of immigration of non-Western immigrants can be found on the NYFER website (NYFER performs applied research at the intersection of economics and policy). The report (pdf) can be downloaded here, and also at the PVV website.