The report Borderless Welfare State maps the costs and benefits of immigration for the Dutch treasury. It is an update of the public finance section in the 2003 CPB Bureau for Economic Policy Analysis immigration study Immigration and the Dutch Economy.

The core of the method used is that it maps the costs and benefits over the entire life cycle of immigrants. We call the benefits minus the costs the net contribution. The calculations are based on anonymised data of all 17+ million Dutch residents. The Dutch population is growing due to immigration. Of the 17+ million Dutch residents at the end of 2019, 13% were born abroad (first generation) and 11% were children of immigrants (second generation).

Government spending on immigrants is now mainly above average in items such as education, social security and benefits. In contrast, immigrants pay less taxes and social security contributions on average. When added up, the net costs of immigration turn out to be substantial: for immigrants entering in the 1995-2019 period alone, they are on the order of the magnitude of total natural gas revenues from the 1960s onwards. These costs are mainly due to redistribution through the welfare state. Continued immigration with the current size and cost structure will put increasing pressure on public finances. Diminishing the welfare state and/or curtailing immigration are then inevitable. The average costs and benefits of different immigrant groups differ widely. The report charts the differences. Migration for work and study from most Western countries and some non-Western – especially East Asian – countries show positive outcomes. All other forms of immigration, are at best more or less budget-neutral or have negative outcomes. The latter is especially true for the motives of family and asylum.

The educational level of immigrants and the citation scores of their children are crucial. If parents make a positive net contribution, the second generation tends to be comparable to natives. If parents make a strong negative net contribution, the second generation also tends to lag significantly behind. So the adage ‘the second generations will be fine’ does not hold true.

Immigration is not a solution to ageing. If you want to keep the percentage of over-70s constant with immigration, the Dutch population will grow extremely fast to around 100 million by the end of this century. Ageing is mainly ‘dejuvenation’. Far fewer children are born than necessary to maintain the population. And immigration does not solve ‘dejuvenation’. The only structural solution is an increase in the average number of children. Using migration to absorb the costs of ageing does not seem a viable route either. That would require large numbers of above-average immigrants, with all the consequences for population growth that that would entail.

Immigrants who on average make a large negative net contribution to public finances are mainly to be found among those using the right of asylum, especially if they come from Africa and the Middle East. The total population in these areas will increase from 1.6 billion today, to 4.7 billion by the end of this century. Maintaining the existing legal framework, especially concerning the right of asylum, does not seem a realistic option under these circumstances.