The Economics of New Immigration to Scotland

This report evaluates the role that immigration could play in shaping Scotland's economic future. Traditionally Scotland has been a net-exporter of people with negative net-migration throughout most of the last century. However, in the past few years, the situation has reversed itself and Scotland is currently a sizeable net-importer of people. Much of this recent increase in net-migration has been driven by immigration from the countries that joined the European Union in 2004. Evidence suggests that this immigration has contributed to short-term economic growth and it is likely that immigration will become increasingly important to long-term economic growth. However, immigration from these countries is declining. Therefore, relying on these flows indefinitely to rebalance Scotland's demographic deficit is extremely risky. It is argued that the required immigration levels will only be achieved through a managed points-based immigration system that explicitly takes into consideration economic and demographic differences between regions. That is, the adoption of the type of immigration system that has been in place in such countries as Canada and Australia for the past four decades.