Refugee immigration and public sector finances : longitudinal evidence from Sweden

This is an analysis of refugee immigration and public sector finances in Sweden. All refugees who were listed in the national population registers from 2005 to 2007 are tracked from 2006 to 2012. We present two measures of the public sector’s net costs related to refugee immigration. In the first measure, public revenues are related to all public costs associated with refugee immigration. The second measure relates public revenues to public costs associated with immigration, excluding costs that can be assumed to be fixed in the short run when refugee immigration increases. By presenting these two measures we are able to present an upper and a lower bound for the public net costs of refugee immigration during a refugee´s first years in Sweden. Our results reveal that during a refugee’s first year of residency in Sweden after the asylum application has been approved, the public sector net costs for that refugee’s immigration are between 95,000 SEK and 190,000 SEK, depending on how public costs are allocated to the refugee population. After seven years in Sweden, the cost for that refugee is between 37,000 SEK and 125,000 SEK. Large differences are found between refugees with different educational attainment as regards the extent to which they incur a cost for the public sector’s finances.The results in this paper are based upon a report written for the Swedish Fiscal Policy Council by Aldén and Hammarstedt (2016), ”Flyktinginvandring – sysselsättning, förvärvsinkomster och offentliga finanser”, Studier i finanspolitik, 2016:1. The authors are grateful for comments from members of the Swedish Fiscal Policy Council and from Bertil Holmlund and Joakim Sonnegård. The authors are also grateful for discussions with Spencer Bastani and Jan Ekberg.