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Immigration supports growth long term: IMF

AAP logoAAP 27/09/2016 Colin Brinsden, AAP Economics Correspondent

At a time of heated debate over refugees both in Australia and across the globe, the International Monetary Fund believes there are long term benefits for countries absorbing the immigration in-take.

In a new study, the IMF calculates for every one percentage point increase in migrant workers it results in two percentage points more economic growth in the long run.

It concedes arrivals can provoke social tensions, security concerns and even political backlash.

"Yet ... migration can also offer economic gains in term of higher growth and productivity," it says in early released analytical chapters of its forthcoming World Economic Outlook.

Migrants can offer some relief for an ageing population, it says.

While high-skilled migrants provide a positive contribution to host economies, lower skilled migrant workers can also help raise productivity growth.

For example, the availability of relatively low-cost workers in the services or health care sector may allow high-skilled women to enter the labour force or work longer hours.

However, migration also presents challenges for countries of origin as the departure of the young and educated seeking better economic opportunities can take its toll on long-term growth.

"The loss of human capital translates into lower productivity, a worsening of skill composition and dampened tax revenue," the Washington-based institution says.

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