Recent protests against undocumented immigration in parts of South Africa have once again thrust immigration to the forefront of public debate. Concerns over jobs, crime, pressure on public services and the cost of undocumented migration have fuelled calls for tougher border controls and stricter enforcement of immigration laws. At the same time, businesses in sectors such as agriculture, construction, hospitality and domestic services continue to rely heavily on migrant labour. These competing realities have intensified the national conversation, often producing more emotion than evidence.
Amid the political rhetoric and public frustration, an important question remains: What does the evidence tell us about the economic impact of undocumented immigration? While every country has its own unique circumstances, decades of research from both developed and developing economies provide valuable insights into how migration affects employment, wages, public finances and economic growth. A growing body of international research paints a far more nuanced picture than the polarized debate often portrayed in the media.
Immigration is often one of the most contentious public policy issues, with debates frequently centred on whether migrants take jobs from local workers or become a burden on public resources. Evidence from developed economies, particularly the United States, shows that migrant workers-including many without legal status-make substantial contributions to economic growth. Although unauthorized immigrants account for only about 5% of the U.S. workforce, they generate roughly 3% of private-sector GDP and contribute billions of dollars annually in taxes, including payments into Social Security and Medicare systems from which they receive little or no benefit.
The research also finds that immigrants often fill jobs that local workers are reluctant to take, particularly in agriculture, construction, hospitality and other physically demanding occupations. Rather than replacing native workers, migrants frequently complement the domestic workforce, allowing businesses to expand and increasing overall economic productivity.
The picture is more complex in developing countries. In economies with high unemployment and a large supply of low-skilled labour, an influx of low-skilled migrants may place downward pressure on wages and increase competition for informal-sector jobs. These effects tend to be concentrated among vulnerable local workers rather than the labour market as a whole. South Africa presents a particularly challenging case. With persistently high unemployment-especially among young people and significant income inequality, concerns about labour market competition are understandable. At the same time, sectors such as agriculture, construction, hospitality and informal trade continue to depend heavily on migrant labour. This illustrates why the economic effects of migration cannot be reduced to simple slogans.
Another important finding is that many migrants work below their qualification levels because of legal or administrative barriers. Studies suggest that granting legal status to undocumented workers can significantly increase productivity, improve job matching, encourage business investment and raise economic output.
Some reports also question the effectiveness of some restrictive immigration policies. Costly border infrastructure, mandatory employment verification systems and extensive documentation requirements have often delivered limited economic benefits while imposing substantial administrative costs and encouraging informal employment.
Researchers emphasize that the long-term effects of migration differ from the short-term impacts often highlighted in public debates. While a sudden increase in labour supply may initially affect wages in some sectors, businesses typically respond by investing, expanding production and creating additional employment opportunities over time. As a result, the long-run impact on native employment and wages is generally found to be small in most developed economies.
Overall, the evidence suggests that labour migration is neither an unqualified economic burden nor an automatic economic benefit. Its impact depends on the structure of the host economy, the skills of migrants, labour market conditions and the policies adopted by governments. Well designed migration policies that balance economic needs with effective regulation can help countries maximize the benefits of migration while mitigating its potential costs, particularly for vulnerable groups in the labour market. Immigration is ultimately an economic issue as much as it is a political and humanitarian one. The challenge for policymakers is not simply whether to allow or prevent migration, but how to design policies that protect national interests while harnessing the economic contributions that migrants can make. Evidence-not emotion-should guide that conversation.