Editing Openai/69640cff-e5e0-8003-a8d1-a78b118ca18b (section)

==== When economists ask whether the UK “reaps net welfare gains” from immigration, they typically mean: does the set of people already in the UK end up with higher total real income (and/or utility) because of immigration, after accounting for all relevant channels? ====

It helps to separate three objects that are often conflated:
* (A) National income / real GDP: Immigration almost mechanically raises total output because there are more workers. That’s not the same as gains to pre‑existing residents, because the additional output partly accrues to the migrants themselves.
* (B) Residents’ welfare (often: natives’ welfare): In the simplest competitive model, the gain to pre‑existing residents is the classic “immigration surplus” (a typically small triangle) plus any genuine externalities/spillovers, minus any genuine costs. The distribution can change a lot even if the net is small and positive.
* (C) Government budget / fiscal balance: A positive fiscal contribution can raise residents’ welfare (e.g., lower tax rates or better services), but the fiscal balance is not a welfare measure because it treats transfers as “costs/benefits” even when they are redistribution among residents; and because welfare includes non-fiscal channels like consumer prices, productivity spillovers, and amenity/congestion effects. Ian Preston’s conceptual survey emphasizes how accounting exercises can miss behavioural/general equilibrium and “indirect” effects.

Also, on your point about prices:
* Pecuniary effects (price changes that reshuffle purchasing power among residents, e.g., higher rents benefiting landlords and hurting renters) are mostly redistribution, not a social cost “for the economy as a whole.”
* Real externalities (true social costs/benefits) include congestion, crowding of a public good, pollution, crime, productivity spillovers, etc.

Housing is a good example: higher rents can redistribute from renters to landlords; whether there is a net welfare loss depends on things like housing supply constraints, distortions, crowding, and who you include in the welfare objective.