Measuring economic integration of immigrants: development and empirical validation of the EIIM index in EU regions

Abstract

Immigration has become a structural driver of economic development in the European Union, yet its economic impact varies significantly across regions. These differences suggest that immigration scale alone does not explain macroeconomic outcomes; rather, the quality of immigrants’ economic integration plays a decisive role. However, existing research typically measures integration using isolated labour market indicators or policy-based indices without constructing a unified framework for assessing economic integration. This study develops the Economic Immigrant Integration Index (EIIM) and assesses its macroeconomic relevance. EIIM treats integration as a multidimensional economic phenomenon and combines four standardized components: migration policy quality, employment convergence between immigrants and native-born populations, income convergence, and a fiscal participation indicator adjusted for regional unemployment levels. Using data from five European regions, the empirical analysis applies OLS regressions with log-transformed regional GDP as the dependent variable and includes immigration intensity together with selected macroeconomic controls. The results show that immigration intensity is consistently the strongest and most robust correlate of regional log(GDP) across all five European regions. EIIM is positively associated with GDP in bivariate models in most regions. However, its independent contribution is region-specific. In reduced multivariate specifications, EIIM remains positive and statistically significant in Central and Southern Europe, indicating additional explanatory power beyond immigration scale. In Eastern Europe, EIIM becomes statistically significant only after controlling for immigration intensity and net migration, with a small coefficient suggesting limited economic relevance relative to scale effects. In Western Europe, EIIM is not robust once migration scale and migration-flow dynamics are included. Overall, the findings indicate that migration scale and integration quality represent distinct dimensions, but the macroeconomic relevance of integration quality varies across European regions. EIIM therefore offers a transparent and policy-relevant tool for comparative assessment of economic integration performance in Europe.