10.2 The Fiscal Burden of Migration

Few could have failed to take note of the public debate and political manoeuvring over the fiscal impact of migration, in general, and of refugee migration, in particular. ‘Objections to the perceived burden placed by immigrants on public finances’, one scholar observes, ‘seem to motivate much popular opposition to immigration’.Footnote ⁸ Under the title ‘Are migrants good for the host country’s economy?’ another scholar observes: ‘Indeed, the impact of migration on the host country’s economy is possibly the most crucial question that policy-makers have to answer.’Footnote ⁹ In October 2021, the Danish Ministry of Finance published figures that were said to show that non-Western migrants represent a net cost of 1.4 per cent of GDP. The data fit like a glove with the Social Democratic government’s goal, adopted in 2019, of ‘zero asylum migration’ to Denmark. According to Torben Tranæs, head of research at Denmark’s National Research Centre for Welfare, it was precisely the alleged negative fiscal impact of non-Western migrants that ‘changed the Social Democrats’ perspective’.Footnote ¹⁰ Similarly, when the German government, in November 2023, concluded its migration deal with the Christian Democrat opposition, extolled as ‘a very historic moment’ by Chancellor Olaf Scholz, much emphasis was placed on the fact that the deal ‘significantly scales back social benefits for refugees’.Footnote ¹¹

In the news media the message concerning migrants’ ostensibly negative fiscal impact is also commonplace, and during the 2015–2016 refugee crisis it was amplified even further. In September 2015, the International Business Times fretted: ‘EU refugee crisis: how will European countries pay for the influx of thousands of people?’Footnote ¹² In an equally rhetorical style, a headline in The Atlantic queried: ‘Can the welfare state survive the refugee crisis?’Footnote ¹³ ‘Ballooning refugee costs threaten Germany’s cherished budget goals’, a Reuters headline noted, while another one in Die Welt claimed that the ‘Refugee crisis could cost [Germany] nearly one trillion euros’.Footnote ¹⁴ The sense that Germany’s fiscal health was hinged on a drastic reduction in refugee numbers was growing, with the deputy finance minister, Jens Spahn, saying that ‘[m]oney for other things that we might want is simply not there’.Footnote ¹⁵

Commenting on the Swedish government crisis after the 2018 elections, The Economist alleged that ‘refugees tend to drain the public purse’ and that ‘this avoidable policy error has helped to poison Swedish politics’.Footnote ¹⁶ Furthermore, in its post-election analysis in 2018, The Guardian claimed that the ‘163 000 migrants’ who arrived in Sweden in 2015 had been ‘magnifying popular concern about a welfare system many felt was already under strain’. In particular, the article continued, Sweden is plagued by ‘[l]ong waits for operations, shortages of doctors and teachers’.Footnote ¹⁷

In essence, the message was the same from Sweden’s social democratic-led governments at the time. In the autumn of 2015, the finance minister, Magdalena Andersson, declared that the large refugee admission was ‘financially unsustainable’ and would cause fiscal deficits for the coming years. ‘We will both have to reduce spending and borrow’, she asserted in an interview in October 2015. ‘It’s about cutting migration costs as well as looking into spending cuts in other areas. But we will also have to borrow money.’Footnote ¹⁸ In November 2015, a typical headline in a major daily paper read: ‘The deficit is growing: government’s expenditures sharply increase due to the growing number of refugees.’Footnote ¹⁹

During the election campaign in 2018 the Social Democrats depicted the newly arrived refugees as not being keen enough on learning the language, joining education and training programmes, finding work and thus contributing to the welfare of their new country. Whereas the prime minister, Stefan Löfven, spoke about refugees’ ‘duty’ to make themselves ‘employable’ in the same breath as he promised to show organized crime the door, Magdalena Andersson said asylum seekers had better go somewhere else. Andersson, who took the most hawkish position, repeatedly declared migrant integration a failure and went as far as claiming that a restrictive asylum policy was a fiscal prerequisite for fighting child poverty in Sweden.Footnote ²⁰ Around the same time the minister for justice and home affairs asserted that a government summer programme that subsidised bus fares for high school students had been made possible and affordable only thanks to cuts in refugee spending: ‘If we had not tightened up our migration policy in 2015 there would have been no fiscal space left’.Footnote ²¹

10.3 The Real Benefits of Migration

With the change to a right-wing government in 2022, migration and refugee policy has been elevated to become the government’s defining mission. With much emphasis on reducing asylum numbers and associated costs even further, the explicit aim is to implement a ‘paradigm shift’ in Swedish asylum and migration policy. In the autumn of 2023, the government announced that it was commissioning the National Institute of Economic Research (sorting under the Finance Department) to conduct a study on the fiscal costs of migration, focusing on the welfare costs and tax contributions of mainly refugee migrants. One the purposes is to assess from which countries the costliest migrants come.Footnote ²² To be sure, the Ukrainian refugee crisis has changed both Sweden’s and the EU’s tone on refugee policy. Yet, this change only applies to ‘European’ refugees from Ukraine. Nevertheless, Swedish governments have continued to emphasise the ‘costs’ of Ukrainian refugees as well.Footnote ²³

But the claim that refugees are a fiscal burden on the Swedish welfare state is guided by a fundamental misconception. Just think of The Guardian’s reporting just mentioned, where refugee migration is said to impact negatively on an already strained Swedish welfare state that struggles with backlogs and staff shortages in the health-care system. What the British newspaper fails to consider is the fact that, without migration, the backlogs and staff shortages would have been even more acute. As an in-depth OECD study on the matter found, the share of foreign-born medical doctors in Sweden stood at 30.5 per cent in 2015/16, up from 23 per cent in 2000/2001. Iraqi and Romanian doctors make up two of the largest groups within the cohort of foreign-born doctors in Sweden.Footnote ²⁴ At Sweden’s largest hospital, Sahlgrenska University Hospital in Gothenburg, 35 per cent of the doctors, 18 per cent of the nurses, 28 per cent of the assistant nurses and 30 per cent of the biomedical analysts are foreign-born.Footnote ²⁵ Moreover, close to 30 per cent nationally (and about 55 per cent in the Stockholm region) of elderly care workers in Sweden are foreign-born, of whom the overwhelming majority have a refugee background.Footnote ²⁶ As one Swedish regional newspaper heading put it a few years ago: ‘Without immigration elderly care falls apart’.Footnote ²⁷

The situation is similar in many other EU countries. When the pandemic hit the EU in the spring of 2020, the issue of essential workers came to the fore, and it soon became clear that low-skilled migrants were playing a key role. As a study published by the German Institute of Labour Economics summed it up:

In 2018, 60 per cent of all cleaners in Sweden were foreign-born. The same was the case for 51 per cent of bus and tram drivers; 49 per cent of taxi drivers; 68 per cent of maids, nannies and related personnel; 42 per cent of restaurant and kitchen assistants; 49 per cent of machine operators in laundering; 44 of machine operators in meat and fish processing; the list goes on.Footnote ²⁹ Although it consistently refuses to mention these facts in the public debate, in a report from 2018 even the Swedish government conceded as much: ‘Without the foreign-born women and men, the elderly care would face significant problems in fulfilling its task.’Footnote ³⁰

10.4 The Poverty of Research

The people who, proportionally, do more to maintain essential societal and welfare functions are said to burden and make those same welfare functions financially unsustainable. The task of science here must be to correct this misleading message. But that kind of science is very hard to find. At best, we find research that bases itself on the same sound finance premises as the one arriving at the trade-off conclusion, but that, instead of costs, finds fiscal benefits from migration. This conclusion rarely applies to low-earning migrants though, and never to (the initially) non-earning refugees.

When thoroughly examining the sizeable literature on the ‘fiscal impact of migration’, however, this lacuna is easily explained.Footnote ³¹ As already mentioned, when the neoclassical sound finance paradigm is applied, as it is – knowingly or unknowingly – by all the contributors to the literature, the central government is conceived of as roughly analogous to a household. This assumption applies universally, independent of the smorgasbord of different monetary regimes that any given state may adopt. This means that everyone whose tax payments fall below average is a fiscal burden. These inhabitants are said to receive more in government welfare spending than they pay in.

From the perspective of the research into the fiscal impact of migration this is just a scientific fact, and so research cannot be held accountable for being complicit in stoking the sentiment that refugee reception and low-earning migrants jeopardize the welfare state. As one expert in the field puts it: ‘The lower the skills and earnings of migrants in the host country, the greater will be the strictly economic case for restricting some of their welfare rights in order to minimize the fiscal costs for existing residents.Footnote ³² The ‘strictly economic’ serves to indicate that the issue at hand is neither grounded nor decided within the realm of policy choices. Rather, objective economic laws of fiscal sustainability are said to constrain what is politically feasible.

According to world-renowned economist Branko Milanovic, ‘[t]he arrival of migrants threatens to diminish or dilute the premium enjoyed by citizens of rich countries, which includes not only financial aspects, but also good health and education services.’ Yes, you read right, migrants working in the health services are supposedly diluting ‘the premium enjoyed by citizens of rich countries’. Admitting low-earning migrants therefore ‘requires withholding some civic rights’, Milanovic asserts. ‘We can debate the sharpness of the trade-off, but cannot deny its existence.’Footnote ³³ In Milanovic’s quest to figure out ways to ‘pay for increased migration’,Footnote ³⁴ such withholding of rights to migrants – or ‘discriminatory treatment’, as he terms it – are both necessary and beneficial to all. Migrants, Milanovic suggests, ‘could also be made to pay higher taxes since they are the largest net beneficiaries of migration’.Footnote ³⁵

Finally, here’s another representative scholarly view, published in the International Organization of Migration’s (IOM) journal International Migration:

As asserted in the quote, the factuality of refugees constituting a ‘fiscal burden’ ‘is not possible to argue against … with solid empirical evidence’. And since a fiscal burden, by definition, is synonymous with something very negative in the public debate, we should not be surprised if politicians and the public take those making up the burden – i.e. the refugees – to be undesirable too.

In response to this, the proponents of the cost perspective can simply say that to hide the truth about refugee migration goes against the scientific ethos and would thus make for an even worse place to begin integration. Many would add that tampering with the truth will only aid the anti-immigration populists – a particularly common retort from mainstream politicians and scholars who want to mark their distance from the extreme right. Since so few have challenged the basic principles and maths of the cost perspective, it has gained an air of unassailable truth. But those who claim that they side with accuracy in order to avoid playing into the hands of the anti-immigration right do something even worse than allowing the cost assumption to stand unchallenged. They give it new life and credibility by insisting it be acknowledged in advance. It is like starting a discussion about equal pay by insisting that we first acknowledge that women are a fiscal burden on men because women pay less in taxes – and that trying to diminish or hide this ‘fact’ only would play into the hands of the sexists.

10.5 Modern Monetary Theory

In employing the descriptive macroeconomic framework provided by Modern Monetary Theory (MMT),Footnote ³⁷ we can explain further why the cost perspective builds on a flawed economic conception. I have already stressed that the orthodox ‘sound finance’ economics conceives of state spending as analogous to household spending. Here, therefore, spending amounts to little more than a cost, in the same way that a household looks at its outlays. As a consequence, the money spent on refugees would have to be made up for through tax hikes, ‘risky’ borrowing or by removing funds from other areas, such as welfare benefits intended for needy citizens.

For countries that issue their own fiat currencies, however, none of this applies. Since the central government is the monopoly issuer of the currency, it follows, both in logical and in concrete terms, that it necessarily has to spend or lend the currency (via the banking system) into existence before it can collect it back in taxes. If this was not the case, there would be no money to pay taxes with and the banks would have no central bank reserves to buy government bonds with. Such governments are thus the exact opposite of municipalities, business and households. The latter all have to collect, earn or borrow the money before they can spend; they are mere users of money, not issuers.

Consequently, as MMT explains, currency-issuing governments are not revenue-constrained in the currency they issue. This means that taxes collected by the central government are not used to fund government spending as they are when collected by countries that do not issue their own currencies or currency-using bodies such as municipalities or constituent states in federations. Central government taxes fulfil other indispensable functions and purposes. By constantly removing a large chunk of money from the private sector, taxes work as a powerful anti-inflationary measure while at the same time moving real resources (e.g. labour) from the private to the public sector. Taxes also work as an instrument regulating income and wealth distribution, and they are used to promote or discourage various industrial practices and individual behaviours. And there are, of course, other purposes that central government taxes can be made to fulfil, but revenue for spending and saving for future spending do not form part of them.

Likewise, such governments do not have to borrow their own currency in order to spend. As MMT demonstrates, the real purpose of bond sales in a sovereign currency is not fiscal (for financing purposes) but monetary. They are carried out in order for the central bank to hit its overnight interest rate target (the interest banks pay when borrowing reserves from each other overnight).Footnote ³⁸

To be sure, all countries that issue their own currencies still impose unnecessary and politically invented fiscal frameworks, including balanced budget rules, debt brakes and spending ceilings. One of the most common rules stipulates that governments must ‘borrow’ and thus sell bonds to the private sector when it lacks the funds or deposits at the central bank to match the spending. But, again, currency-issuing governments do not need to borrow the currency whose issuing it monopolizes. In fact, as Mitchell and Fazi reveal, such governments ‘could run fiscal deficits without issuing debt at all: the central bank could simply credit the relevant bank accounts to facilitate the spending requirements of the treasury, regardless of whether the fiscal position is deficit or surplus’.Footnote ³⁹ Another option would be for the finance department to sell debt directly to the central bank, a procedure that is also prohibited by most countries. But, even when currency-issuing governments sell bonds to the private sector, these bonds can be ‘sold’ only on the premise that the government first provides the central bank reserves with which banks purchase the bonds. Again, a government ‘must spend (or lend) its currency before it can receive it back either in payment of taxes or in purchase of its debt’.Footnote ⁴⁰ Hence, when currency-issuing governments create fiscal frameworks that require bond sales to the private sector, or banks – instead of no sales or sales directly to the central bank – the banks pay for this by using the reserves that they have in their accounts at the central bank. And bank reserves can only be created by the central government (i.e. the treasury and the central bank); and they are created in three ways: (1) when the government spends;Footnote ⁴¹ (2) when the central bank lends bank reserves to banks; and (3) when the central bank purchases bonds.Footnote ⁴²

With the onset of the pandemic in March 2020, the European Commission suspended the Stability and Growth Pact’s austere fiscal rules and the ECB launched the Pandemic Emergency Purchase Programme (PEPP). In short, the PEPP involved the ECB buying all the bonds that the banks had bought from the eurozone member states – bonds the banks did not want to hold themselves. The banks thus sold on the bonds they had bought from the member states to the ECB in the secondary bond market.Footnote ⁴³ This removed all risk for market participants as they knew they could always sell on to the ECB, and for a slightly higher price as well. As a result, eurozone countries no longer ran the risk of ‘running out of money’, there was no need for austerity and the ECB’s actions ensured that interest rates on both short-term and long-term government bonds remained very low.Footnote ⁴⁴ In fact, during the pandemic, the ECB bought all government bonds issued by the governments in the eurozone.Footnote ⁴⁵

When then ECB president Mario Draghi stated, in July 2012, that the ECB was ‘ready to do whatever it takes to preserve the eurozone’ – by purchasing government bonds on the secondary market – the basis for the pandemic era’s unconstrained spending in the eurozone was established. But, although the ‘whatever it takes’ initiative demonstrated the fiat quality of the euro, it still had to co-exist with an even more rigid adherence to sound finance orthodoxy and perpetual austerity. With COVID-19 hitting in March 2020, however, this fundamentally changed; all of the fiscal austerity strings that had formerly been attached to the ECB’s bond purchasing were now cut.

Many politicians, central bankers and economists criticised the ECB’s actions and argued for a return to the rules and austerity policies. The critics could also argue, with good reason, that the ECB’s actions ran contrary to the intentions of the EMU framework. However, what they could not claim was that the monetary union could have remained intact without the ECB’s intervention as lender of last resort.

In April 2024, these same critics finally got the best of it when the European Parliament and the Council decided to re-install the Stability and Growth Pact’s austere fiscal rules, after a four-year pandemic-induced pause. A report by the European Trade Union Confederation slammed the decision, calculating that, under the new rules, a mere five countries in the EU ‘would be able to meet at least minimum social and green investments needs’.Footnote ⁴⁶ This will very likely spark a new round of clashes between Brussels and member states over public spending and debt levels.

In addition to this, and with the formal termination of PEPP at the end of 2022, the ECB has, for its part, created a new instrument (the Transmission Protection Instrument, TPI) that allows the ECB to intervene and, if necessary, purchase unlimited amounts of government bonds to lower bond yields in eurozone countries that run the risk of being shut out of bond markets. The TPI thus shows that the ECB will continue to act as a lender of last resort and as the ‘quasi-fiscal arm’ of the euro area.Footnote ⁴⁷ To lend credibility to austerity and the fiscal rules, however, the ECB has entered the political fray, declaring, in April 2024, that, as related by the Financial Times, ‘it could exclude countries from its new but untested bond-buying programme if they do not act on EDP [excessive deficit procedures] recommendations’.Footnote ⁴⁸ Should the ECB actually decide to make good on its threat, and terminate its ‘quasi-fiscal’ function, then countries would not be able to fund themselves and the eurozone, as we know it, would be terminated too.

10.6 Spending Equals Income

As MMT also shows – and as both the unprecedented refugee and pandemic spending in Sweden and the EU confirm – the money spent by the central government always ends up somewhere rather than nowhere, by definition. This contrasts with the orthodox perspective, which only understands expenditure as costs, in the same negative way that a household looks at its costs. However, money cannot disappear because ‘all spending must be received by someone, somewhere, as income’. Again, spending equals income, or, as Wray puts it, ‘[a]ggregate spending creates aggregate income’.Footnote ⁴⁹ This means that when the state spends on refugee integration, for example, the money will show up as net income in the non-governmental sector – in municipalities, businesses and households.

MMT thus emphasises the basic accounting principle that all financial assets will, by definition, be offset by the same amount of financial liabilities. Similarly, any financial deficit will be offset by a financial surplus. Hence, it follows that ‘a government deficit (or surplus) must be exactly offset by a surplus (or deficit) in the non-government sector’.Footnote ⁵⁰ Understanding this, we also understand why government deficits are not something risky or bad, but just another way of expressing that there is a surplus (or net financial saving) in the non-government sector. As Tymoigne explains, ‘fiscal deficits are a boost to the saving level of the domestic private sector’; they ‘sustain national income by injecting more income in the economy than they remove through taxes, which improves the liquidity and solvency of other sectors’.Footnote ⁵¹ When income-dependent sectors can run surpluses, this helps to stabilize the economy as a whole. However, when budgetary rules require the government to tighten continuously, this stability is undermined, either by weakening the economy or by households and firms accumulating a risky debt burden.

10.7 Real Resources, Financial Resources

Another mistake that researchers and policy makers often make is to miss the crucial distinction between real resources, such as labour, and financial resources – a distinction that constitutes one of the starting points of MMT. Therefore, they are unable to appreciate the value of the indispensable work performed by, for instance, the 60 per cent of cleaners in Sweden who are born abroad. Instead, these workers are described as fiscal burdens as they are said to receive more of the state’s welfare spending than they contribute in taxes. According to this logic, Sweden would be better off without the cleaners and other people in low-wage work who came as refugees. This is a very strange logic. Because what would society look like if no one worked in cleaning or food production, or if no one took care of the elderly, drove the buses or worked as assistant nurses?

As already explained, the real resource contribution from the foreign-born has been substantial in Sweden.Footnote ⁵² The fact that Sweden is the only country in the EU (and beyond) that has not seen an increase in the median age over the last decade illustrates this.Footnote ⁵³ With fewer Swedish-born workers joining the labour force than leaving it, the entire net addition of working age people in Sweden has, since 2008, consisted of the foreign-born. Between 2010 and 2017, the number of working age (16–64) Swedish-born people dropped by over 150 000 while the number of working age foreign-born grew by some 360 000 people.Footnote ⁵⁴ This growth will pick up even more until 2025, when the foreign-born share of the working age population is set to hit 27 per cent, as compared to 18 per cent in 2010. The figures for 2017 demonstrates this well. Here, the labour market added 94 000 jobs, of which 75 000, or 80 per cent, went to foreign-born workers.Footnote ⁵⁵

Recent reports confirm this development. Over the past two years, and despite a slowing economy, unemployment amongst the foreign-born in Sweden has been dropping at a record pace. The same goes for the employment rate for the foreign-born, which now stands at 75.1 per cent. This means that the employment rate for foreign-born people in Sweden beats the overall employment rate in the EU (74.6 per cent); the overall employment rate in Sweden ranks second in the EU (82.2 per cent).Footnote ⁵⁶ A recent survey from Statistics Sweden, moreover, describes the current employment situation for the unaccompanied minors (mainly from Afghanistan) who sought asylum in Sweden in 2015. The picture is striking in that it sharply contradicts the gloomy predictions made at the time concerning this particularly vulnerable and ‘costly’ refugee group. As Statistics Sweden reports, today ‘men who came to Sweden as unaccompanied minors are employed to a higher degree than persons born in Sweden of the same age’.Footnote ⁵⁷ Not only that, the proportion of men with an income of at least three income base amounts is significantly higher among unaccompanied minors than among men born in Sweden.Footnote ⁵⁸

10.8 The Fiscal Impact

To manage the reception of 163 000 refugees in 2015, the Swedish government spending increased significantly. The government made sure to inform the public that the spending was a necessary evil that would affect the fiscal health negatively. The economic expertise was even more concerned and urged the government to cut spending and introduce new austerity measures to avoid deficits and debt accumulation. The many forecasts concerning the ‘negative’ fiscal impact of refugees published by the government, its expert agencies and the European Commission were not presented as the uncertain forecasts they always are. Instead, the assertion that refugee spending would cause deficits was consistently presented as a foregone conclusion. However, it was exactly the opposite that transpired. Instead of the large and ‘precarious’ deficits that the experts and the government had guaranteed, the consolidated public sector ran large surpluses in all years between 2016 and 2018 – indeed, even 2015 saw a small surplus.Footnote ⁵⁹

From 2015 to 2017 Sweden paused its sound fiscal framework in order to deal with a serious situation that required a drastic increase in spending. The surplus target and the ‘pay–go’ rule were suspended. Despite claims to the contrary by all parties involved, the spending increases and the growth in public consumption did exactly what they often do: they stimulated demand, investment and employment. In 2016 alone, public consumption rose by 3.6 per cent,Footnote ⁶⁰ a development not seen since the 1970s.Footnote ⁶¹ The economy grew and tax revenue surged so much that successive surpluses were created, which is something that may happen, albeit not necessarily. However, as modern monetary theory explains, the government budget balance is not the important thing. What matters is how the real economy is doing and how resources are being utilised. Do the health and social care systems have enough staff and enough funds? Is private borrowing sustainable? Is investment in renewable energy growing? What about unemployment? Politicians and experts have spent a lot of precious time trying to plug the non-existent and, even if they exist, completely harmless holes in government finances that they claim refugee spending is causing. Much less thought though, has been given to the real needs and resources.

Important, too, is that, while Sweden’s central government, its economic experts and the media were busy worrying about the refugee spending’s negative impact on the future fiscal balance, many rural and de-populating municipalities away from Stockholm were busy welcoming this expenditure as income. Thanks to the refugee spending by the central government, 2016 ended up being one of the best fiscal years ever for Swedish local governments, with practically all of the country’s 290 municipalities running surpluses.

The central government spending to the municipalities financed the reception of refugees and their initial integration. In and of itself this increased public consumption enormously; and it stimulated investment and employment, which boosted overall economic growth. But, since much more money was transferred than was needed for the immediate refugee concerns, municipalities were able to attend to other things too, such as welfare needs, schools and infrastructure. Besides impacting positively on the health of welfare services, in many municipalities refugee funds also enabled municipalities to invest, save and pay down debt.Footnote ⁶²

The admission of refugees – that is, real resources – together with the generous addition of financial resources from the central government thus proved to be a hugely virtuous combination for scores of depopulating municipalities in Sweden. With this we also see the nullification of what scholars and centrally located politicians claim to be an inescapable and indisputable trade-off between refugee spending and welfare spending. What, as Gál claims, we cannot ‘argue against … with solid empirical evidence’Footnote ⁶³ actually turned out to be possible to disprove. Right before our eyes, then, Sweden had built a real-world model – however reluctantly – that was capable of receiving large numbers of refugees while at the same time investing in welfare. Instead of the misconceived trade-off between migration and welfare, the Swedish case demonstrated that it is exactly the other way round. Spending on the refugees, the non-citizen newcomers, became a way of rediscovering the viability of welfare for all. But, instead of discussing its real effects and applicability as a model for the EU as a whole, the Swedish model has since been discarded and deemed fiscally unsustainable.

10.9 Conclusion: Human Rights Are Not an Economic Sacrifice

When politicians sound the alarm over refugee costs, claiming that these threaten the fiscal sustainability of the welfare state, they do so from the comfortable place of being able to cite research. Given that the cost and trade-off perspective is a product of orthodox economics, the fact that it has not been fundamentally challenged by research perspectives that do not profess themselves adherents of orthodox economics should be very puzzling. But most of all it shows both how entrenched the cost perspective is and how unknown its orthodox roots are. This means that the very concepts and worldview that set the parameters for the scholarly and public debate are hidden from view. For the most part, they are just perfunctorily assumed. Progressive scholars often end up treating the trade-off as a self-evident fact that comes with a set of equally self-evident constraints.

Political theorist Joseph Carens – who is one of the foremost academic advocates of migrants’ rights – is a case in point. The trade-off advocates Ruhs and Martin refer to Carens as someone who contends that ‘even if there is a trade-off between migrant numbers and rights, restricting the rights of migrants is always morally problematic’.Footnote ⁶⁴ And, since Carens does acknowledge the trade-off as a reality, this also forces him into an intricate exposition concerning those instances where moral principles actually (albeit problematically) take a back seat to the presumed trade-off reality.Footnote ⁶⁵ As an example of when it is morally justifiable to exclude migrants from welfare, Carens argues that

Correspondingly, Carens mentions schooling for children of irregular migrants as an example of when it is not morally legitimate to exclude. It is important to mention, though, that this is prefaced with an acknowledgement that ‘granting irregular migrant children a right to a free public education imposes a substantial financial cost on the receiving society against its expressed will’. He admits that this and other arguments against such free public education ‘have some force’; but he also believes ‘that ultimately they are outweighed by the moral reasons for granting irregular migrant children a free public education’.Footnote ⁶⁷

Carens walks us through several other instances where it may or may not be morally permissible to exclude migrants from social rights. The point, however, is that this entire exercise is undertaken solely because Carens accepts the trade-off notion at face value. He, as so many other scholars, is adapting his theory to a trade-off thesis he takes to be so self-evident it needs no scrutiny.

Here, then, we can spot a general problem with much of the normative political theory around migration, citizenship and migrants’ rights. It fails to examine what are presented as irrefutable economic constraints – the trade-off, the fiscal costs – and hence feels compelled to adapt and adjust to what are really political and ideological constraints dressed up as economic ones. As I have already pointed out, there is of course also the option of acknowledging the reality of the constraints but then saying that, in practice, we can still afford it because economic losses sometimes have to be accepted in exchange for moral gains and the fulfilment of human rights obligations. In essence, this is what Carens does when he reasons around irregular migrants’ right to education. As one representative voice has it: ‘There may well be a trade-off between numbers and rights, but refusing to grant immigrants a path to residency and citizenship has been argued to be fundamentally unjust and indeed inconsistent with liberal democratic ideals.’Footnote ⁶⁸

But, if politicians can cite research in support of their cost arguments against admitting asylum seekers, most of the time they do not have to. The notion that there is a trade-off between refugee migration and the welfare state is simply common sense in the public debate. The debate is not whether this is actually accurate; everybody agrees that refugees involve costs for taxpayers. The debate is, rather, whether these costs are deemed affordable or not, whether we can afford to be solidaristic or not. It is clear who is winning this debate in terms of policy outcomes; asylum policy is becoming increasingly restrictive and the residence and social rights for those refugees who still manage to enter the European Union are being curtailed. No EU member state wants to share the ‘refugee burden’.

But it is a strange debate, because the losing side, or those defending refugee rights, almost always contend that human rights and solidarity never should be allowed to be subjected to cost–benefit analyses. Given that no one is questioning the assumption that refugee reception indeed constitutes a cost, this position is understandable. Under these circumstances, human rights proponents will always lose a cost–benefit debate over refugee reception. But, as I have shown here, refugee reception is not costly. Rather, it amounts to a beneficial addition of real resources, as illustrated in the Swedish reality above. The government spending on refugees, for its part, will do what government spending always does: it will end up as income in other sectors of the economy – that is, as income for municipalities, businesses and others involved and employed in the management of refugee reception and integration. Those advocating human rights, therefore, do not have to concede the mistaken orthodox assumption that refugees are costly. Nor do they have to think of ‘the economy’ as the enemy. Receiving refugees in the EU is not an economic or fiscal sacrifice.

But, let me be clear: I am not saying that Sweden or the EU should admit refugees because it benefits Sweden and the EU. Sweden and the EU should admit refugees to defend and uphold human rights. On the economics of it all, there is no argument. In admitting and investing in refugees – that is, real resources – societies in Sweden and the EU cannot but benefit.