The migration loss among population groups with higher incomes suffered by Helsinki, mostly as a result of people about to start families moving out, was particularly pronounced in the early 2000’s. Because of the age distribution of migrants, Helsinki has lost potential municipal tax revenue in most years since 2000, particularly in 2002-2007. However, the migration loss among families with small children has been reduced strongly in recent years and is now fairly low.
The annual net income accrual cannot be used to make direct conclusions about “winners” and “losers”, because the incomes of migrants in the years following the migration have an effect on the equation.
On an annual level, Helsinki loses taxable income to other municipalities, but the picture changes when the development of income levels is seen from a longer perspective, and the strong dependency of employment and income levels on the age of residents becomes a crucial factor.
Incomes are low among young adults but rise rapidly after 25 years of age. When residents approach the retirement age, their average incomes start to decline. That is, the income levels of young newcomers follow a rising trend and those of aging emigrants follow a declining trend during the years following migration. For example, a 20-year-old moving to Helsinki is expected to raise his/her income 2.5 fold in 10 years following the move.
On the basis of demographic forecasts to 2030, Helsinki should gain a highly favourable age distribution of residents owing to immigration gains focusing on young adults, in terms of future income and tax-revenue development.
As a result, the age distribution among migrants does not pose a threat to Helsinki’s revenue base in relation to the rest of the Helsinki region, if the trends remain as they are today. However, if the migration patterns were to return to the trends prevalent in 2002-2007, Helsinki’s revenue base would be eroded in relation to the rest of the region.
The data is reported by the City of Helsinki Urban Facts based on Urban Facts data on the incomes of migrants in 2001-2010.