Immigration has no effect on unemployment
“Controlling immigration is critical or we will risk losing another generation to dependency and hopelessness”, Iain Duncan Smith said last year, arguing that substantial reductions in immigration were necessary if his reforms, designed to move people from welfare to work, were to be successful. And, just yesterday, Migration Watch published a report highlighting the “remarkable coincidence between the rise in youth unemployment and the huge surge in immigration from Eastern Europe over the last eight years.”
In fact, most published studies suggest that immigration has little or no impact on employment or unemployment. Today NIESR publishes new research supporting that conclusion. For the first time, rather than using survey data, we use actual data on National Insurance number registrations – the best and most comprehensive measure of people moving to this country to work. We look at the number of registrations for each local authority and see whether there is any relationship between that and changes in the number of people claiming unemployment benefit; as far as we can tell, there isn’t any. Unemployment didn’t rise faster (or fall more slowly) in areas where migration was higher; and that doesn’t change if we control for other factors that might make a difference.
Another issue is the impact of immigration during the recession. Previous research was dominated by the long period during which the UK labour market was doing well, for both natives and migrants. So it is reasonable to question whether things might have changed during a period when the competition for jobs was much more intense. But again, we can’t find any evidence of an adverse impact during periods of low growth or the recent recession.
What about the Migration Watch report? As it says, betwen 2004 and 2011 an extra 600,000 Eastern European workers entered the UK labour force, while youth unemployment rose by 400,000. But the vast majority of that rise in youth unemployment took place during 2008 and 2009. During that period, the number of Eastern European workers actually fell. A “remarkable coincidence” – or simply exactly how you would expect the labour market to respond? Nor is this the only hole in Migration Watch’s analysis, as Matt Cavanagh points out here.
This is not the first time that Migration Watch have played fast and loose with the evidence. An earlier report, still on their website, argues that because (for example) Manchester has more young unemployed people than Windsor, and also more migrants, this demonstrates a relationship. The point that Manchester just has more people is conveniently ignored.
The question of what impact immigration has on native British workers, especially the young, is an important one. Economic theory alone does not provide the answer; careful empirical research, and responsible debate, is required. Ours is not the last word, but so far the evidence suggests that other factors are far more important. As the Prime Minister has rightly said: “it’s crude and wrong to say immigrants come to Britain to take all our jobs.”Tagged in: david cameron, employment, Iain Duncan Smith, immigration
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