Another battle of the have-nots? The Impact of Immigration on the Poverty Risk of Western European Natives

This paper examines the impact of immigration on natives’ poverty risk in Western European countries. In doing so, it contributes to the academic debate on immigration impact in two manners. First, it introduces a novel outcome in this debate, i.e. natives’ poverty risk. Second,
it brings together two strands of literature: that of the immigration impact on labour market outcomes and the one on the relationship between immigration and public finance. In fact, since poverty risk significantly varies in consequence of work attachment and public programs access, the impact of immigration on the poverty risks of European natives can be coherently investigated by combining the labour market channel with the public-finance channel. Empirically, we estimate to which extent immigrants affect poverty risk of natives, measured in terms of income poverty and material deprivation. Our analysis focuses on both the overall impact, i.e., how all immigrants affect the poverty risk of all natives, and the more specific skillcomposition impact, i.e., how the share of low-skilled immigrants affects the poverty risk of low-skilled natives. To this end, we analysed an aggregate panel dataset composed by EU-15 countries plus Norway and Switzerland, annually observed for the period 2005-2018. Our findings indicate that higher shares of immigration do not increase the risk of poverty and material deprivation among natives.



Publication number: Working Paper 2022-07
Date: 09/2022
JEL Classification: J61, O15, I3
  • Poverty risk of natives, Immigration, Western Europe