A detailed lifetime fiscal-balance study for the Netherlands, based on data from Centraal Planbureau (CPB) and Centraal Bureau voor de Statistiek (CBS), reveals major differences in net public-finance contributions by immigrant region of origin, with Somali and other Horn of Africa immigrants being a major net burden on the Dutch taxpayer, especially when compared to other immigrants like Japanese or American immigrants.
According to the model, immigrants from countries such as Japan and North America generate large positive lifetime net contributions—around €200,000 each. Immigrants from regions such as the Horn of Africa (Somalia, Ethiopia, Eritrea, Djibouti) and Middle East show large negative contributions—first-generation immigrants from the Horn of Africa have net costs of €606,000 over their lifetimes.
The analysis says these disparities primarily due to labour-market and tax-payment gaps rather than educational attainment. Educational scores among second-generation immigrants are shown to be similar to Dutch natives, yet incomes and contributions remain lower.
Researchers also find a strong statistical link between the “cultural distance” of an origin region and net fiscal contribution: larger distances (e.g., from African-Islamic countries) are associated with more negative net balances, the IZA report says.
The reference category—a native-Dutch person—is just around budget-neutral over their life course.
The report finds that while second-generation immigrants generally perform somewhat better economically than their parents, most groups still fail to reach a net positive fiscal balance. First-generation Horn of Afrida immigrants, for instance, cost the Dutch state an estimated €600,000 over their lifetime, while their Dutch-born children still represent a net cost of roughly €450,000. In contrast, children of Western and East Asian immigrants not only sustain but often slightly increase their parents’ positive fiscal contributions.
According to the CPB/CBS model, differences in employment rates and lifetime earnings explain the majority of the fiscal gap, more than education. Immigrants who achieve steady employment (such as those from the United States, Japan, and India) tend to generate substantial net surpluses for the state. Meanwhile, refugees and "family-reunification" migrants from poor regions, many of whom don't speak the native language, remain un- or under-employed and heavily dependent on public welfare.
According to the model, immigrants from countries such as Japan and North America generate large positive lifetime net contributions—around €200,000 each. Immigrants from regions such as the Horn of Africa (Somalia, Ethiopia, Eritrea, Djibouti) and Middle East show large negative contributions—first-generation immigrants from the Horn of Africa have net costs of €606,000 over their lifetimes.
The analysis says these disparities primarily due to labour-market and tax-payment gaps rather than educational attainment. Educational scores among second-generation immigrants are shown to be similar to Dutch natives, yet incomes and contributions remain lower.
Researchers also find a strong statistical link between the “cultural distance” of an origin region and net fiscal contribution: larger distances (e.g., from African-Islamic countries) are associated with more negative net balances, the IZA report says.
The reference category—a native-Dutch person—is just around budget-neutral over their life course.
The report finds that while second-generation immigrants generally perform somewhat better economically than their parents, most groups still fail to reach a net positive fiscal balance. First-generation Horn of Afrida immigrants, for instance, cost the Dutch state an estimated €600,000 over their lifetime, while their Dutch-born children still represent a net cost of roughly €450,000. In contrast, children of Western and East Asian immigrants not only sustain but often slightly increase their parents’ positive fiscal contributions.
According to the CPB/CBS model, differences in employment rates and lifetime earnings explain the majority of the fiscal gap, more than education. Immigrants who achieve steady employment (such as those from the United States, Japan, and India) tend to generate substantial net surpluses for the state. Meanwhile, refugees and "family-reunification" migrants from poor regions, many of whom don't speak the native language, remain un- or under-employed and heavily dependent on public welfare.
