Lisbon 02 July, 2026 : Immigration plays a significant role in strengthening the economies of developed countries by increasing productivity, encouraging investment, and supporting long-term economic growth, according to a new study presented at the European Central Bank (ECB) Forum in Sintra, Portugal.
The research, led by economist Giovanni Peri of the University of California, Davis, found that immigration contributes more to long-term productivity growth than relying solely on population growth among native workers. The study examined migration trends across OECD countries between 1990 and 2024.
Researchers concluded that immigration not only helps offset the effects of ageing populations but also stimulates business investment, innovation, and entrepreneurship. These benefits become more visible over time as immigrants integrate into the labour market and contribute more fully to the economy.
According to the findings, net immigration has accounted for a substantial share of labour productivity growth in several European countries over the past three decades. The study estimates that immigration contributed around 28% of labour productivity growth in Spain, 19% in the United Kingdom, and 14.5% in Italy during the period studied. These figures represent roughly one-third of total productivity growth in those countries.
The research also highlights the importance of highly skilled migrants. Workers with expertise in science, technology, engineering, and mathematics (STEM) were found to generate stronger gains in innovation, human capital, and overall productivity. They are also more likely to create businesses, invest, and develop new technologies.
At the same time, the study found that lower-skilled immigration does not reduce productivity. Instead, its overall impact on labour productivity is broadly neutral, contradicting claims that such migration harms economic performance.
Professor Peri explained that the strongest economic benefits usually appear around ten years after migrants arrive. This is because successful integration takes time, while native workers also adapt by specialising in complementary roles, making the overall workforce more productive.
The researchers argue that immigration should not be viewed simply as a way to increase the size of the workforce. Instead, it can act as a catalyst for investment, entrepreneurship, innovation, and sustained economic growth, particularly in ageing European economies facing demographic decline.
The findings were presented during the annual European Central Bank Forum on Central Banking, held in Sintra from June 29 to July 1, where policymakers, central bankers, economists, and academics gathered to discuss Europe's economic future.