New migrants are not automatically choosing life in the big city
People born overseas account for one in eight of the UK's working age population, an official report says.
The Home Office paper says economic immigration has "clear benefits" for the UK - but it adds that the lowest paid can experience falls in wages.
Recently-arrived workers from Eastern Europe have not led to British people losing their jobs, the report says.
The paper has been published before a meeting of a government body looking at the regional impact of immigrants.
The report into the economic impact of immigration draws together a comprehensive range of research from across government and the academic world.
It quotes official labour market statistics which reveal that in the final quarter of 2006 people born overseas accounted for 12.5 % of the working age population - up from 7.4 % a decade earlier.
Migration added 0.5% a year to the working age population between 2001 and 2006, the report says.
The report also says that on average migrants earn more than UK-born workers, and are thought to be more productive.
But migration has had no significant impact on the unemployment rates of British citizens, it says.
According to Treasury figures in the report, migration contributed around £6bn to output growth in 2006.
However, the report admits it is difficult to assess immigration's effect on GDP (gross domestic product) per head - one measure of the size of the economy.
The paper prepared for the Lords Select Committee on Economic Affairs says evidence suggests immigration had a slightly positive effect on wages - but that there were "very modest negative effects" for the lowest-paid unskilled workers.
But that deflationary effect was in turn mitigated by the national minimum wage.
Immigration Minister Liam Byrne said the Migration Impacts Forum, a new advisory body, would on Wednesday assess what was known about the situation around the country - and also look at restrictions on Bulgarian and Romanian workers.
"There is evidence that has been collected by the Migration Impacts Forum (MIF) region by region on impacts of European migration on local communities," said Mr Byrne.
"It's a bit patchy but I believe it is a vital start. It tells us that the pace of change, particularly in communities that do not have a history of absorbing migrants, has been unsettling and has created challenges for public services."
But Habib Rahman, of the Joint Council for the Welfare of Immigrants, questioned the government's approach.
"We welcome the minister's acknowledgement of migrants' economic contribution. However the minister needs to recognise that migration can never just be a cash cow for 'UK PLC.'
"Migrant communities are not represented at all on the new Migration Advisory Committee and barely represented on the Migration Impacts Forum.
"We urge the home secretary to review membership of these organisations so that migrant communities obtain some stake in the way the system is operating."
Sir Andrew Green, chairman of Migrationwatch said: "This report confirms that any benefit to the native population is very small. The addition to GDP at 0.5% is almost exactly the same as the addition to population.
"It amounts to an amazingly thin case for mass immigration"