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Europe's migrant crisis: Is it bane or boon to jobs and benefits?

Europe's far-right groups and governments warn that immigrants will take jobs and social services from native Europeans. But economists say that's inaccurate.

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People are seen at the French Pole Emploi (National Agency for Employment) stand during the 20th Forum de l'Alternance in Paris, May 2015.

Charles Platiau/Reuters/File

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At a government employment office in the east of Paris, a line snakes through the hallway as people wait to claim unemployment benefits. Roussel Djiki is busy printing out job offers, in what has been a months-long job search. He says he’s already frustrated by the lack of available positions, and is only expecting things to get worse now that France has announced it will welcome another 24,000 refugees over the next two years.

“There’s less and less work,” says Mr. Djiki, who wasn’t born in France but has lived here for 30 years and only recently left the labor market. “Even before this migrant situation, there were fewer jobs. Now, it’s only going to be harder.”

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Djiki’s fears have been echoed across Europe, with many saying the influx of migrants will negatively impact jobs and social benefits. That has fed populist rhetoric from groups such as France’s National Front party, which claims that immigration costs the French state 70 billion euros per year and has called for an all-out end to immigration. Several governments are similarly opposed, including Romania, Hungary, the Czech Republic, and Slovakia, all of which voted against an EU-wide mandatory quota, approved Tuesday, to distribute 120,000 Syrian refugees across Europe.

But while some economists offer doomsday theories about the money Europe has already lost to immigration and stands to lose once more people arrive, the commonly accepted opinion among most economists is that immigration does not markedly affect economies and if it does, it’s in an upward direction.

“Most studies come up with positive benefits when it comes to migration,” says Tim Hatton, a professor at University of Essex whose research focuses on economics, migration, and the labor market. "There are lower dependency rates on the state and immigrants contribute more, not less.”

Most migrants, says Professor Hatton, come with the intention to work and contribute significantly to the work force. An OECD report from 2014 showed that migrants accounted for 70 percent of the increase in Europe's workforce in the past 10 years, as opposed to 47 percent in the US. They lift up the working age, fill declining sectors of the economy, and contribute to labor-market flexibility – how quickly labor markets adapt to changes in society – according to the study.

Allowing immigrants the right to work cuts both ways in Europe – while they may contribute to the economy, they also take away precious jobs. France is currently battling an 11 percent unemployment rate, while Spain's and Greece's hover around 22 and 25 percent, respectively.

But the common fear that immigrants steal away jobs from locals is unfounded, says Xavier Chojniki, an economist and professor at the University of Lille III, who has worked to battle common misconceptions in France regarding immigration. His study of the country’s finances in 2005 found that immigration brought in 3.9 billion euros to the French economy that year, with much of that gain stemming from so many immigrants entering the labor market.

Prof. Chojniki argues that immigrants and locals usually do not compete for the same jobs, but work in a complementary fashion. In other words, immigrants take jobs that French people don’t want.

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But Emmanuel Martin, the director of the Paris-based Institute for Economic Studies Europe, says it’s not that simple. While many will find jobs, Mr. Martin argues that France’s highly regulatory labor market makes it extremely difficult for immigrants to enter the workforce in a meaningful way, creating “insiders” and “outsiders.” That means immigrants essentially get “regulated” out of jobs they would otherwise want.

At the Paris employment office, Juliet – who asked to be referred to only by her first name – has seen this firsthand. She came to France from Nigeria five years ago. Even though she holds a master’s degree and a teaching diploma, she says she’s been stuck working as a nanny since she arrived. “I’ve experienced a lot of discrimination here,” she says. “The minute they see I’m African and have an accent, they won’t take me.”

In France – and across Europe – immigration also sparks fears about a drain on the social systems that citizens have paid into to provide health care, unemployment, retirement, and education. As tens of thousands of refugees begin trickling in, some worry that they will take the systems' resources, leaving less for the whole.

But the OECD and studies conducted by economist Chojniki found that immigrants make more tax and social contributions than they receive in benefits. And for the number of migrants who do use retirement or health care benefits, there are just as many or more people in the workforce to balance out the books.

Juliet hopes to be one of the latter. She says she has never asked the French state for anything. Even her visit to the unemployment office is not to collect benefits but to look at the job ads pasted to the wall. "I’ve had to start my life all over from the beginning,” she said. “I am not asking for anything, just a job."