Financially literate people are more tolerant of migrants

The more financial knowledge a person has, the more likely they are to hold positive views on immigration, according to a new study.

The British Election Study (BES) has collated around 30,000 reports analyzing Britain’s electoral behavior dating back to 1964, and found that people who correctly understood key financial principles such as interest rates and inflation were less likely to agree with the notion that migrants posed a "burden" to society.

However, the report noted that relatively few people had a sophisticated level of financial knowledge, meaning that the majority of people are likely to be swayed by anti-immigration policies at the upcoming election.

This underlines the fact that knowledge and understanding are crucial for designing effective labor market policies, and securing public support. Several IZA World of Labor authors discuss the benefits of migration, namely Klaus F. Zimmermann, who shows why migration patterns are typically circular, and can help to fill labor shortages and boost economic growth.

Meanwhile, Amelie F. Constant negates the notion that migrants take the jobs of native workers, highlighting evidence which shows that migrants are most likely to take jobs that natives will not or cannot do. Migration often complements native labor markets, and helps them to work efficiently.

Giovanni Peri also helps to dampen fears that immigrant workers depress native workers’ wages. He collates evidence to show that immigration has a very small effect on native wages; furthermore, he shows how immigration can boost innovation, which can in turn increase productivity and lead to wage increases.

Read more here.

Related articles:
Circular migration, by Klaus F. Zimmermann
Do migrants take the jobs of native workers, by Amelie F. Constant
Do immigrant workers depress the wages of native workers? by Giovanni Peri