The Fiscal Cost of Refugee Immigration: The Example of Sweden

Abstract

The world currently has more refugees and internally displaced persons than it has had since World War II. Yet the readiness of many wealthy countries to provide asylum to these refugees is waning, and a major reason for this is the fiscal burden that would result from larger refugee intakes. To evaluate the size of this fiscal burden, this study estimates the net fiscal redistribution to the total refugee population in Sweden, the country with the largest per capita refugee immigration rate in the Western world since the early 1980s. The total redistribution in 2007 corresponds to 1.0 percent of Swedish GDP in that year. Four‐fifths of the redistribution is due to lower public per capita revenues from refugees compared with the total population, and one‐fifth to higher per capita public costs.

Nordic Economic Policy Review

“…In this section I report in detail the results of the two existing studies that estimate the fiscal impact of refugee immigration in Sweden: Ruist (2015), and Aldén and Hammarstedt (2016). Given the similarities between the Nordic fiscal and welfare systems, per refugee these estimates are likely to be representative also of the other Nordic countries, for which similar estimates do not exist.…”

“…Of somewhat less immediate policy relevance is my study (Ruist, 2015) of the fiscal redistribution from the rest of the population to the entire population of refugee immigrants and their family members in Sweden in 2007. This estimate thus attempts to measure the accumulated fiscal impact in one year of several decades of refugee immigration.…”

“…Yet also in the Nordic countries, where the data does enable finer analysis, the majority of studies focus on this the most aggregated level. If they are at all concerned with finer units, also these tend to be quite highly aggregated like Western / non-Western, or European / nonEuropean immigrants (examples include Wadensjö and Orrje, 2002;Gerdes et al, 2011;Holmøy andStrøm, 2012, Flood andRuist, 2015).…”

“…Ekberg (2009) ascribe total corporate ownership between all natives and all immigrants in proportion to these groups' total capital income. I(/we) ascribe them equally across the population in Ruist (2014a,b) and Flood and Ruist (2015), while I set corporate ownership to zero for refugee immigrants in Ruist (2015).…”

“…Previous experiences of war and persecution might imply higher costs per individual both in health care and schools. In Ruist (2015) I use information from other sources to roughly account for such differences. I do the same for crime and justice costs, which I also estimate with a markup for refugees.…”