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New reports question impact of migration on UK unemployment

Summary:
Reports by the government's Migration Advisory Committee and NIESR offer conflicting conclusions on immigration and UK unemployment levels
Date of Publication:
10 January 2012

New reports question impact of migration on UK unemployment levels

10 January 2012
EIN

New reports from the National Institute of Economic and Social Research and from the government's Migration Advisory Committee (MAC) paint a conflicting picture of the impact of immigration on unemployment.

In May 2011 the Government asked the MAC to 'research the labour market, social and public service impacts of non-EEA migration; and to advise on the use of such evidence in cost-benefit analysis of migration policy decisions.'

The MAC has today published a report that addresses this question. The 156-page report is available here.

According to The Guardian, the "explosive" report finds that immigration to Britain from outside Europe is linked to unemployment in depressed economic times.

The MAC report states: "We find no association between working-age migrants and native employment: (i) in buoyant economic times; (ii) for EU migrants; (iii) for the period 1975-1994. By contrast, we find a negative association between working-age migrants and native employment: (i) in depressed economic times; (ii) for non-EU migrants; (iii) for the period 1995-2010. A ballpark estimate is that an extra 100 non-EU working-age migrants are initially associated with 23 fewer native people employed. Such evidence suggests that successive governments since 2008 have been right to make non-EU migration more selective. It also leads, tentatively, to the conclusion that the present assumption in IAs that none of the output lost by lower migration is made good by higher employment of British workers is sometimes wrong and needs amending."

The Guardian states: "The finding directly challenges the established academic consensus that there has been little or no direct link between immigration and employment levels in Britain. It flatly contradicts research from the National Institute of Economic and Social Research published on Monday, which found that even in the recent recession there was no direct impact."

A National Institute of Economic and Social Research press release stated: "Our results, which appear robust to different specifications, different levels of geographic aggregation, and to a number of tests, seem to confirm the lack of any impact of migration on unemployment in aggregate. We find no association between migrant inflows and claimant unemployment. In addition, we test for whether the impact of migration on claimant unemployment varies according to the state of the economic cycle. We find no evidence of a greater negative impact during periods of low growth or the recent recession."

The National Institute of Economic and Social Research report, Examining the relationship between immigration and unemployment using National Insurance Number registration data, is available here.