Immigrants contribute more to the Swedish economy than people born in Sweden

What was the report about?

The report, which the institute was tasked with putting together on behalf of the government back in 2023, investigated among other things the net contribution of people born outside of Sweden compared to those born in Sweden.

The government tasked NIER with calculating “the costs of immigration”, telling them specifically to look at the net cost or benefits of immigration for labour migration and asylum seekers, even listing the average cost or benefit per person and per country of origin.

The most recent data used in the report is from 2022, as that was the last full year of data available at the time it was written.

This was calculated by subtracting each group’s public expenses – for example the cost benefits and public services they have received – from the income the state receives from them in taxes.

Essentially, a positive net contribution for a particular group means that that group’s resources are effectively redistributed to a different group through public finances. Some groups, for example children and the elderly, generally have a negative net contribution, as they pay less tax and use expensive public services like schools, preschool, pensions, care and healthcare. Others, for example people of working age, generally have a positive net contribution, effectively earning money and paying tax to fund other groups in society.

For immigrants, NIER said, and refugees in particular, the time spent in Sweden is important when it comes to net contributions, as it can take time to get established on the Swedish labour market and start paying tax. 

How did the figures differ between groups?

In 2022, the most recent figures in the report, around 2.2 million people living in Sweden were registered as utrikesfödd, literally born outside the country. This group had a slightly positive contribution to public finances of six billion kronor, or around 0.1 percent of GDP. In individual terms, that’s an individual contribution of around 2,700 kronor per person.

People born in Sweden had almost exactly the opposite figures, with a net negative contribution of -6 billion kronor, or -0.1 percent of GDP. Their individual contribution per person was negative at around -700 kronor (this is lower than the figure above as there are more of them).

Sweden’s immigrant population is roughly one third refugees (around 789,000) and two thirds “other immigrants” (1.4 million). 

When the group of people born outside Sweden was split into these two groups, the picture was slightly different. Refugees had a negative net contribution of -22 billion kronor, or -0,4 percent of GDP. For other immigrants, this figure was much higher, with a positive net contribution of 28 billion kronor or 0.5 percent of GDP. This was by far the highest positive contribution of any group in the study.

On an individual basis, “other immigrants” contribute an average of 19,800 kronor per person to the Swedish economy.

NIER writes that even though the “refugee” group as a whole had a negative net contribution, there were substantial variations within the group (as there were with other groups). When this group was limited to people of working age, the ten percent contributing the most had an average net contribution of almost 500,000 kronor per person, while the ten percent contributing the least had an average individual negative net contribution of -300,000 kronor. 

In general, the most expensive cost to the state for people born within Sweden was pensions, followed by childcare, schooling and health and social care. This is mainly due to the fact that most foreign-born people move to Sweden as adults so Sweden does not need to fund their schooling.

The most expensive posts for immigrants were financial benefits, child benefits and unemployment insurance, especially when it comes to refugees, as well as fees related to the justice system and integration.

How did the figures differ by country of origin?

NIER listed contributions by country of origin for immigrants from countries with at least 15,000 foreign-born residents in 2022.

The country with by far the highest net contribution to Sweden was India, with Sweden’s 56,000 Indians contributing 6.6 billion kronor to the Swedish economy in 2022 or 119,000 kronor per person. That’s more than the entire negative contribution of those born in Sweden (-6 billion).

The next highest group, according to NIER, was “non-European Anglo-Saxon countries”, more specifically the US, Canada, Australia and New Zealand, followed by former Yugoslavian countries, Iran, new EU member states who joined in 2004 or 2007 and “Other Western Europe”, defined as Belgium, France, Ireland, Luxembourg, The Netherlands, Portugal, Switzerland, the UK, Germany and Austria.

Chile was next, followed by China, Lebanon and Thailand.

As far as groups with a negative contribution to state finances were concerned, Swedish-born people had the smallest negative contribution, costing the state around 6 billion kronor, or 700 kronor per person. Next up were people from Iraq, followed by Ethiopia, “other Nordic” (Denmark, Iceland and Norway), and Afghanistan. Rounding out the groups at the end of the graph were Eritrea, Somalia and Syria, with Finns costing the state the most per person in 2022 (-13.7 billion kronor, or 99,000 kronor per person). 

This is primarily due to the fact that many Finns who arrived as labour migrants between 1950 and 1970 are now middle aged or older, meaning that they have high costs for pensions, healthcare and elderly care.

NIER does also warn that the figures in its report should be taken with a pinch of salt – certain expenses and incomes can either not be calculated directly or the available data is not broken down on an individual level, such as figures for schools, healthcare, infrastructure or indirect taxes like employer fees, so many of them are based on assumptions. The figures also do not take into account other effects of immigration on the Swedish economy, such as higher productivity or effects on the labour market.

Has there been any criticism of the report?

The report has received criticism for essentially being a “talking point order”, essentially an attempt by the government to get NIER to publish figures supporting its hard line on immigration.

In an article in Expressen, Daniel Suhonen and Tony Johanson from union think-tank Katalys, argued that the figures in the report were a “cold shower” for the government, which the day before it was released chose to highlight only one figure in a press conference – the cost of refugees to the Swedish economy.

Suhonen and Johanson also criticised the way the figures were reported, arguing that many immigrants have lower than average incomes and pay lower than average tax, but that this is not the same as them “costing” the state money.

“The problem isn’t that they show profits or costs, rather differences in tax payments and use of welfare, but lower tax payments is not a ‘cost’,” they argued, among other things highlighting the fact that immigration can benefit the country in other ways than purely through higher tax income.

“If you claim that NIER's figures show that refugees are a ‘cost’, then you also have to admit that those born in Sweden also represent a ‘cost’ – and that right now, those born outside Sweden are the ones keeping Swedish public finances afloat,” they said.

“We suspect that’s not what the government and Sweden Democrats were asking for when they ordered these calculations from NIER.”