Net migration plummets across wealthy nations

The Economist highlights in a recent article that net migration to wealthy countries plunged sharply after an unprecedented surge in 2022 and 2023, with nations like Britain, Canada, the United States, and New Zealand all experiencing significant slowdowns. 

While this decline is partly due to the easing of pandemic-driven disruptions and changing global crises, stricter immigration policies are playing a major role. Despite hopes that lower migration would boost wages and ease housing costs, early signs suggest the economic benefits are not yet materializing, presenting new challenges for policymakers.

Britain’s net migration halved, while Canada recorded a net inflow of just 60,000 people in the last quarter of 2024 - down dramatically from 420,000 in mid-2023. The United States experienced a steep decline too, with net migration slowing to an annualized rate of 600,000 in April, a stark fall from 4 million in 2023. Similarly, New Zealand’s net migration dropped by 80 per cent in March compared to its late 2023 peak.

This widespread decline follows an unprecedented surge in migration during 2022-23, driven partly by “catch-up” movements after pandemic-related border closures and eased labor shortages. The humanitarian crisis in Ukraine has also stabilized, reducing urgent migration flows.

Policy shifts are a major factor as well. The US has taken the most aggressive stance: under former President Donald Trump, border surveillance along Mexico tightened drastically, visa restrictions increased, and deportations rose by 25 per cent. High-profile ICE raids have further discouraged migrants. Europe follows a similar path, with EU governments increasing deportations by 30 per cent last year. Hungary’s deportations tripled, and Ireland saw a sixfold increase in early 2025. The UK and Canada are also tightening immigration rules, with the latter imposing caps.

Despite political claims that reducing immigration would improve living standards by raising wages and lowering housing costs, early data challenges this. Wage growth across advanced economies is slowing, and unemployment is rising, notably in Canada. US data shows wages in sectors with many immigrant workers, like drywall installation and janitorial work, are weakening despite less competition.

Housing markets tell a similar story. Between 2022 and 2024, rents surged and home prices stayed high despite elevated interest rates. While research links migration to rising rents, the recent drop in migration hasn’t eased housing costs—rental inflation remains high, and house prices continue climbing in countries like the US and UK.

The benefits of slowed migration may simply be delayed. Migrants contribute to economic demand, fill undesirable jobs, and support construction, enabling housing supply growth. Western politicians aiming to cut migration and raise living standards may find delivering on the latter far more complex than expected.

By Naila Huseynova