Observatoire de l’Immigration et de la Démographie (OID) is an independent laboratory of ideas founded by experts in demography, public administration and migration research. It is directed by Nicolas Pouvreau-Monti, and is supervised by the technological Council composed of erstwhile heads of service, prefects, ambassadors and professors of demography and law.
In fresh days, OID has published a study ‘Impact de l’immigration sur l’économie’, analysing the impact of migration on the French economy in the light of data from 2024. The methodology is based on a comparison of employment and productivity rates of immigrants with the general population mention data and a simple model of GDP-to-work proportionality. The survey only takes into account the direct impact of employment rates, excluding advanced qualitative effects and sectoral interactions. The study is an crucial tool for decision-makers, showing the real economical costs of migrant influx.
Negative economical impact
1. GDP failure due to lower immigrant employment
French GDP for 2024 was €2 917 billion. The 2.3 percent point difference in the employment rate between the home population (70.7%) and immigrants and their descendants (68.4%) translates into 3.36% lower GDPloss €98 billion A year. The failure of €98 billion is, for example, the equivalent of the state budget for education per year or around €25 billion of infrastructure investments – an amount adequate to cover about 1 5th of the full public transport expenditure.
The per capita conversion shows that each of the about 7.6 million people with a migrant background "costs" an average of 12 900 € of lost GDP per year. If we break this value into quarters, the economy loses an average of €24.5 billion in added value in each quarter. These effects are so straight reflected in the slowdown in the dynamics of private and public investment and lower taxation revenues, which hinders the financing of public services. In the long term, specified a production deficit reduces the pace of expanding the distance to more industrialised countries (NEMs, Italy) where the employment rate of immigrants is close to the national average. Against the OECD , France ranks 2nd from the end in terms of the comparative professional activity of immigrants, which translates not only into losses in GDP but besides into a deterioration in the competitiveness of the economy as a full .
2. Public finance burden
In 2024, the budget gross from taxes and contributions paid by persons with a migrant background covered only 86 % of public expenditure on their behalf, with an EU average of 97 % . This means that € 1 spent on public services for immigrants was co-financed in 14 % by the general budget, generating a full of 45 billion € yearly deficit, i.e. 1.5 percent points of GDP.
Spreading costs by category:
- Education and higher education: approx. €12 billion (including renovation costs, language support, compensatory programmes)
- Health care: €15 billion (free admissions in hospitals, insurance, prevention programs)
- Social benefits and housing: €18 billion (social housing, household benefits, integration benefits)
These categories are most heavy burdened by local and central finance, and any of the costs are administered by local governments, which, in the face of deficits, shift spending to another taxpayers or reduce investment in municipal infrastructure. If the employment rate of immigrants were to emergence to 70.7%, the budget gross would increase by around €45 billion, which would reduce the public sector deficit by half or fund additional training programmes for disadvantaged groups. In the long term, omission of this growth reserve means the request for higher taxes or cuts in basic expenditure.
3. Labour productivity decline
Labour productivity in France (measured GDP per employed) decreased by 3.5 % between 2019 and 2018, while it increased by 0.55 % annually on average. By subtracting the effect of the pandemic crisis, the trend deficit is about 5.5 percent points. A competitive advantage is being built by countries that have restored production efficiency after the crisis, while France is falling behind.
The main reason is the low level of qualifications of recently arrived immigrants. 42 % have an advanced secondary education at most, compared to 24 % in the general population. Language barriers extend the implementation time in the post by an average of 6-9 months. Training and adaptation costs (language, wellness and safety, circumstantial processes) amount to €1 500 per employee. In practice, this means that, despite the supply of labour to the deficit industries, businesses bear additional support costs and any of the employees are directed to support tasks with lower added value. The net effect is to reduce GDP per occupation by around 2.1% and to reduce real wages by 1.3% in sectors with advanced employment .
4. Sectoral disturbances
Construction (13 % of migrant workers) and safety and care services (total of 28 %) benefit from the inflow of inexpensive labour, which reduces wage costs in the short word and reduces labour shortages. However, these industries make GDP with low added value and limited multiplier effects – all €1 in construction gross translates into only 0.4 € of additional production in another sectors (in industry, this ratio is 0.9).
Companies exporting industrial goods experience an increase in the costs associated with the fiscal deficit of migration, which is partially passed on to the company through higher taxes and social contributions. A little flexible cost structure means that the disparity between higher taxes and low added value from inexpensive labour leads to the drawing of production to countries with lower labour costs or automation investments. Moreover, the share of manufacture in GDP fell from 18.8% in 2000 to 12.5 % in 2021, which, without the impetus of highly skilled immigration, makes it hard to rebuild the industrial base. The deficiency of migration in the STEM (Science, Technology, Engineering, Mathematics – i.e. science, technology, engineering and mathematics) section deepens dependence on exports of natural materials and services, alternatively of developing advanced technologies and production of capital goods. As a result, France is losing its position as innovation leader, as confirmed by the declines in global competitiveness rankings.
Negative social and demographic impacts
1. force on social strategy and housing
Immigrants benefit from a wide scope of social benefits much more frequently than those without migration. In 2019, the average yearly value of benefits (except for pensions and allowances for work) was €2,380 per immigrant, while for people without a migration background it was €1,200. This difference means not only higher spending of social assistance centres, but besides the request to redistribute additional resources from the remainder of taxpayers, which increases social tensions. There is besides strong force on social housing – 35 % of immigrants aged 18–59 live in municipal housing, compared to only 11% without migration, with extremes of 57% among visitors from Saharan Africa. The expanding cost of maintaining resources and the request for fresh investment in social construction make real challenges for the budgets of cities and municipalities.
2. Integration challenges and adaptation costs
The employment rate of the first and second generations of immigrants (62.5% and 59.7%) remains lower than that of the general population (70.7%) . This translates into a permanent exclusion of the social part, resulting in a advanced NEET rate in the generation of immigrant children: 24 % of young people are not employed or educated (second highest percent in OECD, after Belgium). The integration process involves costs specified as language and cultural training, extending the period of full adaptation by 6-9 months per employee; compensatory programmes in schools to catch up with education; advisory and mediation services for families, especially in specified districts (ZUS) as banlieues.
Zones Urbaines Sensibles (sensible urban areas) is an authoritative category separated by the French authorities for areas affected by advanced unemployment, poorness and social tensions. The word banlieues (meaning "suburbs") in colloquial usage refers precisely to those peripheral urban settlements where many residents face integration difficulties, mediocre infrastructure quality and advanced concentration of social benefits.
These measures absorb a large proportion of local budgets, and their efficiency can be limited by population rotation and complexity of administrative barriers.
3. Effects on education
The improvement of language and compensatory support programmes in primary schools and for vocational school pupils generates spending of €12 billion per year, including additional lessons, tutoring and employment of peculiar educators. Nevertheless, the results of competence tests among migrant background students stay importantly lower than the national average, leading to an increased number of school leavings and lower professional qualifications. In higher education, immigrants account for around 15% of master's students and 41% of PhD students, which, although strengthening the country's technological background, raises concerns about overloading available laboratories and scholarships, as well as about prioritising courses disproportionately to the needs of the local market.
Positive aspects
The study acknowledges that immigration in the current expression helps solve labour shortages in non-international sectors. In construction, the share of migrant workers reaches 13% and the added value of the sector has increased from 4.8% to 5.7% of GDP between 2000 and 2021. Similarly, the private safety sector has seen employment growth from 130 000 to 180 000 between 2010 and 1923, mostly due to the influx of abroad workers.
Although this is more possible than the current state of play, the study shows that restoring industrial participation in French GDP to the EU average (15 % vs 10%) could make an additional million jobs in the industrial sector and another 1.3 million jobs thanks to multiplier effects (1 jobs in manufacture → 1.3 jobs in the remainder of the economy), bringing about €100 billion per year of public revenue. Although these benefits are comparatively low on a macro scale, the influx of immigrants can supply crucial support for local labour markets – especially in regions affected by the shortage of professionals.
Conclusions and recommendations
In order to break the negative "migration and economical trend" indicated in the report, the OID advocates any basic ideas. The right to survey should be removed as a value in itself and the selectivity of final examinations restored. It is proposed to increase the substantive value of the matriculation, reduce the excessive inflow of graduates without marketplace prospects and make short, applicable training paths corresponding to real staff deficits. The advanced school strategy requires a thorough overhaul – the introduction of close cooperation with the private sector, flexible apprenticeship programmes and professional certificates. This will bring graduates straight to the professions that are presently mostly supported by immigrants, reducing the force on government integration programmes
The French benefit strategy generates strong discriminatory effects on professional activity. It is recommended to control to 1 lower than SMIC (minimum wage) social support formula, so that each additional euro of labour actually increases the beneficiary's income, motivating faster entry into the labour marketplace and reducing dependency on benefits. The criteria for granting visas and residence permits should take into account the historical and projected employment rate of nationals in France. Countries with low professional activity should have limited access, while STEM graduates and another key industries should be given precedence treatment.
The combined implementation of these recommendations will not only reduce the net migration deficit (3.36 % of GDP and 1.5 percent points of budget revenue), but besides build a model in which immigration promotes the growth of advanced added value products alternatively than just reducing short-term labour shortages.
The OID study clearly shows that the current migration model generates crucial costs for the French economy: yearly GDP failure of up to €98 billion, a budget deficit of €45 billion and a decrease in labour productivity. At the same time, the benefits of migration – although real in any sectors – stay marginal in relation to the negative macroeconomic balance.
