Immigration-driven growth stunted by global housing shortages | World News

The Impact of Immigration on Economic Growth in Developed Countries

In many developed countries, the traditional model of using immigration as a driver of economic growth is facing challenges. The surge of migrants entering countries like Canada, Australia, and the UK post-pandemic is running into a chronic shortage of housing, leading to a decline in living standards for residents.

Despite Canada and Australia avoiding recession since the Covid contractions, per-capita downturns have eroded standards of living. The UK, on the other hand, experienced a mild recession last year in raw numbers but a deeper and longer one on a per-person basis.

Thirteen economies in the developed world were in per-capita recessions at the end of last year, with housing shortages and cost-of-living strains being common factors. However, the need for more workers due to skills shortages means that immigration is still necessary for economic growth.

In Australia, the influx of migrants has helped fill shortages in industries like hospitality and aged care. In the UK, arrivals from countries like Ukraine and Hong Kong have helped offset the lack of workers post-Brexit.

However, the strain on housing and infrastructure is becoming unsustainable. In Canada, the rapid population growth has led to a housing crisis, with prices soaring and affordability becoming a major issue. The government has had to scale back immigration ambitions to address these challenges.

Overall, the impact of immigration on economic growth in developed countries is complex. While it can help fill labor shortages and drive GDP growth, it also poses challenges in terms of housing, living standards, and infrastructure. Finding a balance that benefits both migrants and existing residents will be crucial for sustainable economic growth in the future.