How Foreign Residents Shape Economic Growth Locally

Expatriates, or expats, play a significant role in the economic landscapes of the countries they reside in. Their contributions extend across various sectors, and a large expat workforce is often the sign of a dynamic and thriving economy.

As well as direct contributions such as taxes, expats contribute indirectly, such as by attending tertiary (post-secondary) education and helping to grow a more highly educated workforce in the long run. But where in the world are expats fuelling the economy the most?

Expat economy index: How foreign residents shape economic growth locally

Our expat economy index explores where in the world expats are fuelling the economy the most. To find out, we’ve analysed each member country of the OECD (Organisation for Economic Co-operation and Development; an intergovernmental organisation founded to stimulate economic progress and world trade). Each country was analysed on factors such as employment rates, tertiary (post-secondary) education rates and financial contributions to the economy.

In which countries do expats contribute the most?

To estimate the countries where expats are most crucial to the local economy, we analysed the following four factors:

• Expat employment rate
• Expat unemployment rate
• Tertiary education rate (the % of the expat population with education beyond school level)
• Revenue per capita ratio (the ratio of revenue contributed by expats to that of native-born individuals)

1/ New Zealand

Economy Contribution Score: 9.31 out of 10
Expat Employment Rate: 80.8%
Expat Unemployment Rate: 3.2%
Expat Tertiary Education Rate: 53.1%

New Zealand comes top, with an Economy Contribution Score of 9.31, reflecting a high economic contribution by the expat population to New Zealand’s economy. The data suggests that New Zealand’s expat population thrives economically, with high employment and low unemployment rates. The tertiary education rate indicates that over half of this demographic has pursued higher education, contributing to their economic success in the country.

2/ Poland

Economy Contribution Score: 9.01 out of 100
Expat Employment Rate: 80.4%
Expat Unemployment Rate: 5.1%
Expat Tertiary Education Rate: 59.6%

Poland is slightly behind New Zealand in second, with an overall score of 9.01 out of 10. Like New Zealand, Poland’s expat population exhibits high employment and relatively low unemployment rates. Moreover, the tertiary education rate is even higher than New Zealand’s, hinting at a well-educated expat population.

3/ United Kingdom

Economy Contribution Score: 8.98 out of 10
Expat Employment Rate: 75.5%
Expat Unemployment Rate: 4.4%
Expat Tertiary Education Rate: 68.4%

In third, with a score of 8.98 out of 10, is the United Kingdom. In the UK, the expat population also exhibits strong economic metrics with good employment and low unemployment rates. The tertiary education rate is notably high, suggesting that a significant portion of the expat population has obtained higher education. The revenue per capita ratio of 1.01 shows that those born outside the UK contribute more taxes and other contributions than those born there.

Top 10 countries where expats contribute the most

Which country has the highest employment rate among expats?

1/ New Zealand

Employment Rate: 80.8%

New Zealand tops the list with an expat employment rate of 80.8%, even higher than native-born individuals’ employment rate (77.2%).

This indicates a thriving labour market that is inclusive and welcoming to expats. New Zealand has historically had expat-friendly policies, which, along with its economic stability, contributes to the high employment rate among the expat population.

The country’s demand for skilled labour in sectors like healthcare, engineering, and IT also attract expats to work there.

Generally, employment rates are slightly higher for native-born individuals than for expats in most countries. However, there are exceptions, such as New Zealand, Poland and Hungary, where the employment rate for expats is higher than that of native-born individuals.

Top 10 countries with the highest employment rate among expats

Which country has the lowest unemployment rate among expats?

1/ New Zealand

Unemployment Rate: 3.2%

New Zealand has the lowest unemployment rate for expats at 3.2%, even lower than the rate for native-born individuals (4.3%).

The country has a reputation for its stable economy and favourable job market, which is conducive to low unemployment rates. This is further enhanced by New Zealand’s immigration policies that aim to fill gaps in the labour market by attracting skilled expats.

Unemployment rates for expats are generally higher than for native-born individuals. This trend is especially pronounced in Sweden, Spain, Austria, Finland, Greece, and Belgium.

Top 10 countries with the lowest unemployment rate among expats

Which country has the highest rate of expat tertiary education?

1/ Canada

Adults with tertiary education: 69.7%

Canada leads, with almost 70% of adults continuing their education beyond school. Canada has a point-based immigration system that favours individuals with higher levels of education. This policy could significantly contribute to the high percentage of expat adults with tertiary schooling.

Many other countries, including the UK, Australia and Poland, also have higher levels of expats achieving tertiary education than those born in their own countries, which shows how attractive they are to highly educated expats.

Top 10 countries with the highest rate of expat tertiary education

Where do expats contribute the most to the economy?

1/ Portugal

Relative revenue per capita: 1.17

Portugal tops the list with a total relative revenue per capita of 1.17, indicating that, on average, expats contribute 17% more per capita than native-born individuals when all tax categories are considered. The highest disparity is seen in employer social contributions (41% more), while capital taxes are significantly lower (71% less).

The other two nations where expats contribute more than the native population are Switzerland and the United Kingdom, with a total relative revenue per capita of 1.01. In Switzerland, expats contribute 9% to employer social contributions; in the UK, they contribute 4% more to indirect taxes.

Top 10 countries where expats contribute the most to the economy

Relative revenue per capita (expat/native-born)

Which industries employ the most expats?

We’ve also looked at which industries employ the most expats. Across the countries listed, manufacturing is the biggest employer, with over 105 million people. Italy and Spain in particular employ many people from overseas in this sector, with 10.2 million and 5.3 million respectively.

Wholesale and retail trade isn’t too far behind, employing just over 100 million people in the countries listed, with close to 40 million of these being in the US.

Industries that employ the most expats

Manufacturing is the most significant industry in 13 countries, followed by wholesale and retail trade, which comes out on top in 9 countries.

Health and social work is the most common in 2 countries, both of which are in Scandinavia, Norway and Denmark. Turkey is the sole nation where agriculture and fishing is the most common industry.

Most common expat employment industries by country

Wherever you move, go with total peace of mind

The expat life can be exciting – and full of uncertainties – especially when your family shares those adventures with you. At William Russell, we have over 30 years experience of helping expatriates finding best places in the world to move abroad and settle into their new lives overseas by providing world-class international life insurance. Plus, we produce lots of expert material to help you and your family adapt to life abroad.

We developed our life insurance plans to meet your unique needs as expats – so you can sleep better at night knowing your family’s covered, wherever life takes you.

Methodology

Each country was analysed on the following four factors. Each was given a normalised score out of ten for each factor before an average of these was calculated. If data was unavailable for a factor, then the score for that country was calculated based on the remaining three factors.

• Expat employment rate – sourced from OECD.Stat
• Expat unemployment rate – sourced from OECD.Stat
• Tertiary education rate (the % of the expat population with education beyond school level) – sourced from OECD.Stat
• Revenue per capita ratio (the ratio of revenue contributed by immigrants to that of native-born individuals) – sourced from OECD iLibrary