LAST YEAR net migration to Britain halved. In the final quarter of 2024, 60,000 people, net, moved to Canada, down from 420,000 in mid-2023. In April net migration to America slowed to an annualised pace of 600,000, a huge drop from 4m in 2023. And in March net migration to New Zealand was down by 80% from its peak in late 2023.
Almost wherever you look, you see the same pattern. After an enormous, indeed unprecedented, rise in 2022-23, migration to the rich world is plummeting (see chart 1).
What will this mean for Western economies? Some of the decline was inevitable. The surge in part reflected “catch up” after a drop in migration during the covid-19 pandemic, when governments closed borders. Labour shortages in the post-covid economy have largely disappeared. The humanitarian crisis in Ukraine has passed its acute phase.
Yet new policies are also playing a big role. The most radical are in America, where President Donald Trump has increased surveillance of the border with Mexico, through which millions of people have passed in recent years. Now almost no one makes the journey. The Trump administration has made it harder for foreigners to obtain visas. And the number of deportation flights is currently 25% higher than a year ago, suggest data compiled by Thomas Cartwright, an independent researcher. Would-be migrants will also be deterred by high-profile raids by Immigration and Customs Enforcement officers.
America is not the only place ramping up deportations. In the final quarter of last year governments across the EU expelled 30,000 third-country nationals, some 30% more than in the previous year. In Hungary deportations have tripled; in Ireland they rose from just 80 in the last quarter of 2023 to 465 in early 2025. Policy changes elsewhere are less extreme, but still significant. Britain is introducing restrictions on would-be migrants, including stronger language requirements. Mark Carney, Canada’s new prime minister, is imposing a cap on numbers.
Many politicians, and some economists, argue that high immigration drags down living standards. It depresses wages, the argument goes, and raises the cost of housing. If true, then today’s declining migration should be starting to boost living standards.
The early evidence shows little sign of that, however. Having won elections promising to cut migration, politicians across the rich world will now have to deal with the consequences of actually doing so.
Consider the labour market first. Overall wage growth is declining across advanced economies, rather than rising as anti-migration types had expected (see chart 2). The unemployment rate is also inching up. In Canada it has jumped by two percentage points from its recent low, one of the worst performances of any rich country. This is not consistent with the idea that immigrants steal jobs from their hosts. Indeed, it is more plausible that some of the leaving immigrants had previously employed native workers.
We have examined American wage data, focusing on occupations where there is a high share of foreign-born workers. Such jobs include drywall installers and janitors. Even as migration has calmed, and competition for these jobs in theory declined, wage growth has weakened.
Developments in the housing market tell a similar story. It is true that across the rich world from 2022 to 2024 housing markets went bananas. Rents soared and sale prices were steady, even in the face of high interest rates. Research suggests that high immigration probably contributed to this state of affairs. A meta-analysis by William Cochrane and Jacques Poot, both of the University of Waikato, finds that a 1% increase in the migrant population of a city leads to a 0.5-1% rise in rents. J.D. Vance, America’s vice-president, has drawn attention to this link.
Yet falling migration is so far not delivering cheaper housing. Rental inflation is still high, at 5% year on year in the rich world, and in recent months has fallen more slowly than overall inflation. In many of the countries where migration is falling fastest, including America and Britain, house prices are nonetheless rising quickly. The housing market’s robust performance is consistent with another idea from the academic literature: though migrants may raise the cost of housing, other factors matter a lot more.
Could the benefits of more measured migration be delayed? Perhaps. But then again migrants do not just impose costs—they also raise living standards. They demand their own goods and services, lifting employment. They tend to take jobs natives do not want, allowing their hosts to move into more lucrative professions. And they are a source of labour in construction, which enables homes to be built. Having promised to toughen borders, and raise living standards, Western politicians may find themselves struggling to deliver on the second part of their vows. ■
halee1 on
Funny how [this](https://www.economist.com/finance-and-economics/2023/05/28/a-new-wave-of-mass-migration-has-begun), aka then highest immigration numbers of all time in Western countries, was the headline on The Economist just 2 years ago. Almost like there’s a cycle and people constantly swing from one extreme to another because they have no idea about the consequences of each action.
Anyway, I mostly agree with the arguments proposed in the article, primarily about “immigrants taking away muh housing” (which seems to have replaced “took our jerbs”. Like, wasn’t there higher population growth in mid-20th century, yet nothing on the scale of this, since homes were actually built en masse?), and that the developed world absolutely requires continued immigration in the long term (even if the sources of that also deplete themselves over time), contrary to xenophobic screeds. At the same time, I’m under no illusion that inflows equaling 2% or more of the population each year are required or sustainable. I think numbers not far below that mark are the perfect compromise between sustaining economies (and giving better lives to those migrating in the process) and the ability of those countries to process that. Arguments that immigrants depress wages aren’t entirely unsubstantiated, as plenty of countries with little immigration grow their economies and wages well, they just tend to be abused as a cover for racism.
3 Comments
LAST YEAR net migration to Britain halved. In the final quarter of 2024, 60,000 people, net, moved to Canada, down from 420,000 in mid-2023. In April net migration to America slowed to an annualised pace of 600,000, a huge drop from 4m in 2023. And in March net migration to New Zealand was down by 80% from its peak in late 2023.
Almost wherever you look, you see the same pattern. After an enormous, indeed unprecedented, rise in 2022-23, migration to the rich world is plummeting (see chart 1).
What will this mean for Western economies? Some of the decline was inevitable. The surge in part reflected “catch up” after a drop in migration during the covid-19 pandemic, when governments closed borders. Labour shortages in the post-covid economy have largely disappeared. The humanitarian crisis in Ukraine has passed its acute phase.
Yet new policies are also playing a big role. The most radical are in America, where President Donald Trump has increased surveillance of the border with Mexico, through which millions of people have passed in recent years. Now almost no one makes the journey. The Trump administration has made it harder for foreigners to obtain visas. And the number of deportation flights is currently 25% higher than a year ago, suggest data compiled by Thomas Cartwright, an independent researcher. Would-be migrants will also be deterred by high-profile raids by Immigration and Customs Enforcement officers.
America is not the only place ramping up deportations. In the final quarter of last year governments across the EU expelled 30,000 third-country nationals, some 30% more than in the previous year. In Hungary deportations have tripled; in Ireland they rose from just 80 in the last quarter of 2023 to 465 in early 2025. Policy changes elsewhere are less extreme, but still significant. Britain is introducing restrictions on would-be migrants, including stronger language requirements. Mark Carney, Canada’s new prime minister, is imposing a cap on numbers.
Many politicians, and some economists, argue that high immigration drags down living standards. It depresses wages, the argument goes, and raises the cost of housing. If true, then today’s declining migration should be starting to boost living standards.
The early evidence shows little sign of that, however. Having won elections promising to cut migration, politicians across the rich world will now have to deal with the consequences of actually doing so.
Consider the labour market first. Overall wage growth is declining across advanced economies, rather than rising as anti-migration types had expected (see chart 2). The unemployment rate is also inching up. In Canada it has jumped by two percentage points from its recent low, one of the worst performances of any rich country. This is not consistent with the idea that immigrants steal jobs from their hosts. Indeed, it is more plausible that some of the leaving immigrants had previously employed native workers.
We have examined American wage data, focusing on occupations where there is a high share of foreign-born workers. Such jobs include drywall installers and janitors. Even as migration has calmed, and competition for these jobs in theory declined, wage growth has weakened.
Developments in the housing market tell a similar story. It is true that across the rich world from 2022 to 2024 housing markets went bananas. Rents soared and sale prices were steady, even in the face of high interest rates. Research suggests that high immigration probably contributed to this state of affairs. A meta-analysis by William Cochrane and Jacques Poot, both of the University of Waikato, finds that a 1% increase in the migrant population of a city leads to a 0.5-1% rise in rents. J.D. Vance, America’s vice-president, has drawn attention to this link.
Yet falling migration is so far not delivering cheaper housing. Rental inflation is still high, at 5% year on year in the rich world, and in recent months has fallen more slowly than overall inflation. In many of the countries where migration is falling fastest, including America and Britain, house prices are nonetheless rising quickly. The housing market’s robust performance is consistent with another idea from the academic literature: though migrants may raise the cost of housing, other factors matter a lot more.
Could the benefits of more measured migration be delayed? Perhaps. But then again migrants do not just impose costs—they also raise living standards. They demand their own goods and services, lifting employment. They tend to take jobs natives do not want, allowing their hosts to move into more lucrative professions. And they are a source of labour in construction, which enables homes to be built. Having promised to toughen borders, and raise living standards, Western politicians may find themselves struggling to deliver on the second part of their vows. ■
Funny how [this](https://www.economist.com/finance-and-economics/2023/05/28/a-new-wave-of-mass-migration-has-begun), aka then highest immigration numbers of all time in Western countries, was the headline on The Economist just 2 years ago. Almost like there’s a cycle and people constantly swing from one extreme to another because they have no idea about the consequences of each action.
Anyway, I mostly agree with the arguments proposed in the article, primarily about “immigrants taking away muh housing” (which seems to have replaced “took our jerbs”. Like, wasn’t there higher population growth in mid-20th century, yet nothing on the scale of this, since homes were actually built en masse?), and that the developed world absolutely requires continued immigration in the long term (even if the sources of that also deplete themselves over time), contrary to xenophobic screeds. At the same time, I’m under no illusion that inflows equaling 2% or more of the population each year are required or sustainable. I think numbers not far below that mark are the perfect compromise between sustaining economies (and giving better lives to those migrating in the process) and the ability of those countries to process that. Arguments that immigrants depress wages aren’t entirely unsubstantiated, as plenty of countries with little immigration grow their economies and wages well, they just tend to be abused as a cover for racism.
“How was I supposed to know the stove was hot??”