ECB Forum: Immigrants Drive Investment and Productivity More Than Native Workers, Study Finds
An international economist speaking at the European Central Bank (ECB) Forum in Sintra said that “immigrants exhibit much higher rates of entrepreneurship, business creation and investment” than native populations.
According to Giovanni Peri, Professor of Economics at the University of California, Davis, immigrants contribute more to productivity growth and investment dynamics in the European and other developed OECD economies that receive them than native-born workers would if those countries had kept their borders closed and relied solely on their domestic labour force.
Peri presented his research on the impact of migration on European economic growth at the ECB’s annual international conference. The study, co-authored with Gaetano Basso of the Bank of Italy and Mitali Mathur of the University of California, sparked lively debate among participants due to the sensitivity of the topic.
The study reaches several conclusions.
Its main finding is that, in ageing advanced economies, such as those in Europe, “the evidence suggests that immigration not only helps offset demographic decline, but also supports long-term investment and productivity growth to a greater extent than native population growth alone.”
The research concludes that, from the early 1990s through 2024, net immigration generated the largest increase in GDP per worker over a ten-year period.
The strongest transmission channel through which immigration boosts the economy is capital deepening—the increase in investment encouraged by the availability of immigrant labour.
In addition, Peri highlights that highly skilled immigrants generate the strongest effects on human capital, total factor productivity and labour productivity, while low-skilled immigration has a neutral impact on productivity, meaning that lower-skilled foreign workers do not harm economic performance simply because they possess fewer qualifications.
Looking more broadly across Europe, the professor argues that, considering more open immigration policies, major migration waves in recent decades and sustained immigration flows, “all of the evidence points in the same pro-growth direction.”
Foreign Workers Show Higher Levels of Entrepreneurship and Investment
By contrast, demographic changes among native populations “showed no positive association with productivity” and, in some cases, the opposite.
According to Peri, net immigration may have contributed 28% of cumulative labour productivity growth in Spain, 19% in the United Kingdom and 14.5% in Italy between 1990 and 2024. These figures are significant, as they account for roughly one-third or more of total labour productivity growth during the same period.
During his presentation, Peri explained that highly skilled immigrants, particularly those specialising in science, technology, engineering and mathematics (STEM), generate more patents, foster greater innovation and have powerful spillover effects on productivity across the wider economy.
He also explained why immigrants often outperform native workers in entrepreneurship and productivity.
“The strongest effects appear after about ten years because integration takes time, even for highly skilled immigrants. Only after full integration can they realise their full economic potential. At the same time, native workers adjust their own specialisation in response to immigration, and that process also requires time.”
Peri further argues that immigrants display much higher rates of entrepreneurship, business creation and investment, which “may help explain the positive impact observed on capital per worker.”
“When we analyse foreign master’s students and international university students around the world, we find that they play an extremely important role as innovators within companies,” he added.
The report also notes that the limited or neutral effect of low-skilled immigration on labour productivity is consistent with its broader findings.
Peri concludes that “these results are consistent with the idea that low-skilled immigration does not reduce labour productivity,” challenging claims frequently made by politicians and public figures who oppose immigration.
The study’s central conclusion is that immigrants do far more than simply replace native workers or increase the size of the labour force.
“Their contribution is much broader—through investment, entrepreneurship and, particularly among highly skilled migrants, stronger innovation. As a result, immigration contributes not only to GDP growth but also to deeper and more sustainable economic progress,” Peri concluded.
The ECB Forum, where this and other studies were presented, is the European Central Bank’s flagship annual conference on economic and monetary policy, held each year in Sintra, Portugal. The 13th edition of the forum takes place from 29 June to 1 July 2026.
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