The impact of immigration on the economy: A closer look at the Netherlands

In this thesis the impact of immigration on the economy is investigated. The thesis focuses on the effect of immigration on the Dutch economy. The effects of immigration on the labor market and the public finances are examined. A comparison is made between western and non-western immigrants. A further distinction is made for the non-western immigrants. The history of immigration in the Netherlands and the policy developments regarding immigration are discussed in the first part of the thesis. The second part of the thesis estimates the labor market effects using a combination of a time series analysis and a cross section analysis. The main findings of the time series analysis are that the labor force participation rate of immigrants has a positive effect on the labor force participation rate of Dutch natives. The total group of immigrants (western and non-western) has no effect on the unemployment rate and income of Dutch natives. However the estimations with the distinction between western and non-western foreigners have shown a different result. The estimations have shown that the western immigrants decrease the unemployment rate of natives and increase the income of Dutch natives. The cross section analysis shows that immigrants with a high education level are preferred over immigrants with a low education level.