Labour immigration and refugee reception, two sides of the same coin
In 2024, 22,800 refugees were settled in Norway, while the number of labour immigrants is assumed to be several tens of thousands each year. S&P has looked at both sides of immigration together – refugee reception and labour immigration. It produces striking socioeconomic calculations.
May 28, 2026 | SOURCES| INTERNATIONAL POLITICS
Image by AI/S&P
The refugee
An adult refugee costs the state 1.43 million kroner during the first six years. This includes registration, case processing, asylum reception and integration grants to municipalities. The introduction benefit averages 244,000 kroner per person per year. In total, the government spends around 17 billion kroner per year on settlement and integration in municipalities. Since 1990, 276,000 refugees have been registered in Norway.
Employment among refugees is low during the first years; most participate in the introduction programme and are outside the labour market. The picture changes over time. After four to six years, 47 percent are in work. After seven to nine years, the share is 55 percent. Refugees who arrived as children and have lived in Norway for more than 20 years have an employment rate of 70 to 74 percent, on a par with the general population, according to Statistics Norway.
Research from OsloMet and Statistics Norway documents a clear link between entering work quickly and successful integration. Refugees who early on establish a connection with an employer participate to a far greater extent in working life the following year.
Refugees send money home. In 2025, a total of 2.9 billion kroner was sent out of Norway via payment institutions, according to the Norwegian Tax Administration's currency register. Afghanistan received 413 million kroner, Somalia 368 million and Pakistan 202 million, according to Panorama Nyheter's access to the register. A Somali sends on average 27,000 kroner per year to their home country. An Afghan sends around 20,000 kroner.
The labour immigrant
Labour immigration from EEA countries has been among the largest immigration flows to Norway. Nearly 193,000 registered labour immigrants have arrived since 1990, most of them after 2004. However, there are large dark figures as EEA citizens are not required to register their reason for immigration. Over 300,000 EEA citizens are today resident in Norway. The exact number of labour immigrants arriving per year is difficult to determine, but the figure is probably several tens of thousands per year.
Labour immigrants are employed from day one and at a level comparable to the general population. Length of residence does not affect the employment rate, according to IMDi.
Fafo has since 2004 followed developments in wages and working conditions in the sectors with the highest proportion of labour immigrants. A report led by Roger Bjørnstad at Samfunnsøkonomisk analyse concludes that wages in the construction industry are eight percent lower than they would have been without immigration, corresponding to 72 kroner less per hour. Over four years, 20 percent of Norwegian-born workers had been replaced in construction. In cleaning the figure was 40 percent, and in the hotel and restaurant industry 50 percent. Around 60 percent of this replacement occurred through low-wage immigrants substituting more expensive Norwegian workers, according to a report from the Centre for Wage Formation, Fafo and Samfunnsøkonomisk analyse. 19 percent of employees in construction report having directly experienced social dumping. Adding those who suspect it, the share rises to 45 percent.
Fafo researcher Jon Erik Dølvik concluded in 2006 that social dumping would be a short-lived problem — that turned out not to be the case.
Based on Fafo's figures, a rough estimate of what the wage pressure actually costs can be made. A standard worker works around 1,750 hours per year. With 72 kroner less per hour, that corresponds to a wage loss of around 126,000 kroner per worker per year. In construction, cleaning, and the hotel and restaurant industry combined, there are around 350,000 employees. The total wage loss in these sectors can thus be estimated at around 44 billion kroner per year. Wages that are not paid out do not circulate in the Norwegian economy. With a standard multiplier effect, the total loss to Norwegian GDP may be in the order of 60 to 70 billion kroner per year. This is a rough estimate with reservations — the wage pressure is documented for construction, but is probably lower in the other sectors. But we know nothing about this because no one has published a consolidated calculation.
A significant share of labour immigrants' income leaves the country. According to Eurostat, EU countries receive a net 2.6 billion euros from Norway per year in personal transfers and labour income, equivalent to around 30 billion Norwegian kroner. Labour immigrants' transfers occur primarily via bank transfers and are not available by nationality in Norwegian statistics.
The socioeconomic accounting that has not been done
The state spends 1.43 million kroner to get one adult refugee through the first six years. During the same period, the refugee sends home between 20,000 and 27,000 kroner per year.
The Eurostat figures suggest that the EEA labour immigrant sends home an estimated 100,000 kroner per year — four to five times more than the refugee. This is a rough estimate with reservations, but the direction is documented.
A refugee who is in work is a full participant in the Norwegian economy as a consumer. All disposable income is spent in Norway — food, rent, clothing, transport, childcare. The money circulates in the local economy and contributes to Norwegian GDP, but no one has calculated how much.
Many labour immigrants live temporarily, consume less locally and send a larger share of their income out of the country. What the labour immigrant sends home is not spent in Norway. What this loss means for Norwegian business and GDP has not been calculated.
Social dumping pushes down wages in construction, civil engineering and cleaning — the very sectors where refugees most often seek their first foothold in Norwegian working life. The state spends 17 billion kroner per year integrating refugees into a labour market that is simultaneously being undermined by cheap foreign labour.
Tax revenues have not been assessed in this analysis, as everyone pays tax in Norway regardless of where their income ends up, and the costs of welfare arrangements are already included in the calculation. It is nonetheless worth noting that lower wages resulting from social dumping affect tax revenues negatively.
Social dumping has an additional effect that is rarely discussed. Professor Roberto Iacono at NTNU has researched the work incentive principle — that it should always pay financially to work rather than receive benefits. His research shows that when wages are pushed down towards benefit levels, many choose benefits over work. Social dumping therefore not only undermines the wage level in vulnerable sectors, it may also increase benefit expenditure.
Unfortunately, a large number of figures relevant to the matter are missing, and we must work with what we have found. Looking at the figures we have found, a clear picture nevertheless emerges that no public inquiry has put into words. The state spends 17 billion kroner per year on integration. EEA labour immigrants send an estimated 30 billion kroner out of the country every year. The wage pressure from social dumping costs Norwegian workers in the affected sectors an estimated 44 billion kroner per year in lost wage payments. With the multiplier effect, the total loss to Norwegian GDP may be in the order of 60 to 70 billion kroner per year.
Adding the figures together — 17 billion in integration costs, 30 billion in capital leaving the country and 44 billion in lost wage payments — gives a rough estimate of around 91 billion kroner per year. The figures partially overlap and must be interpreted with caution, but as mentioned, there are many costs we do not know.
Despite being only an estimate, this indicates very large economic consequences that the government does not account for. 91 billion kroner per year is equivalent to the integration costs for over 63,000 refugees; over the last ten years Norway has on average received 14,500 per year.
Ignoring socioeconomic connections
Statistics Norway carries out analyses on behalf of government ministries — that is, the government. The gaps in the research therefore reflect which questions have been commissioned and which have not. We have figures on what refugees cost. We have figures on social dumping in individual sectors. We have figures on remittances from refugee groups. But we lack many figures and do not have a consolidated calculation that views labour immigration and refugee reception together.
Refugee reception is a humanitarian project. Labour immigration has been sold as a market economy project for business, but following this review it appears more like a social project for low-wage EEA citizens. The market economy project tied to the EU's internal market is a large and interesting topic worthy of its own article.
The problem is that Norwegian authorities do not calculate the socioeconomics of immigration across the different projects. Political parties do not address this issue — presumably because the answer would challenge both the EEA agreement and Norwegian immigration policy.
Democratic principles
A functioning democracy requires that the population has access to information. There is no socioeconomic calculation that sets out the strengths and weaknesses of refugee reception and labour immigration. We know that we need workers, but not how that labour immigration actually serves society and affects the humanitarian project. Unfortunately, the Norwegian immigration debate is about culture, ethnic origin and religion — not the complete picture. This is an ethical and democratic responsibility that Norwegian politicians are not taking.
Is it perhaps the case that an honest and useful immigration debate requires us to distinguish between the humanitarian project, the social project and the market economy project?
SOURCES
SSB - Who are the labour immigrants from the newest EU countries
Regjeringen - 17 billion for integration
OsloMet/NOVA - Strategic reception placement and targeted settlement
Panorama Nyheter - These ten countries receive the most money from immigrants in Norway
Nettavisen - Somalis send 27,000 kroner per year
Hotellmagasinet - 19% and 45% experience social dumping
Arbeidslivet.no - Social dumping not a temporary problem
Eurostat - Personal transfers and compensation of employees 2024
Forskning.no - When wages are too low, many prefer welfare benefits
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