The true effect of migration: growth, higher wages, lower taxes

Closing borders does NOT reduce migration: Closing borders, as also shown in a report by the UK Home Office, would have the effect of diminishing circular EU migration. EU migrants, now able to go to another country, go back to their country of origin and back again to another country, would not be able to do so anymore. This is likely to lead EU migrants to become permanent rather than go back to their country of origins.

This is also evidenced by research in the DEMIG (Determinants of International Migration) project at Oxford University, showing that “immigration restrictions bring down return migration by roughly the same extent as immigration, making the effect of restrictions on net migration very small or insignificant. In order words, borders restrictions have the tendency to push migrants into permanent settlement.”

Professor Hein de Haas from the International Migration Institute at the University of Oxford has a great post assessing the evidence of whether a possible ‘Brexit’ would lead do a decrease in the levels of migration. Here are some highlights:

“The recent increase in immigration to the UK is largely the result of a growth in labour immigration, which reflect increasing labour demand and falling unemployment in the UK. In general , levels of immigration are primarily driven by economic growth and labour demand rather than by immigration regulations – no matter how much politicians would like voters to believe that they are in control.”

See more on this here: Brexit unlikely to curb migration.

Migrants do not take jobs because there is not fixed number of jobs in the economy: The assumption that migration means fewer jobs for native workers is generally referred to as ‘the lump of labour fallacy’. Migrants spend money buying goods and services creating growth and new jobs. See evidence from Jonathan Portes and from the LSE. Also, Hollie McNish rapping based on research.

Skilled migrants raise productivity and wages: migrants to the UK are generally more skilled than the native population. This means that they raise productivity and wages. Here is the evidence. Also, recent work by the OECD finds that halving UK net immigration rates would reduce UK productivity growth by 0.32% per year.

Large increase in immigration has not significantly harmed the job and wage prospects of British workers. Here is the evidence from the Home Office. As researchers at the LSE explain wage stagnation is not due to migration.

“If we look at employment rates of the UK-born over the last four decades since the last EU referendum, there is little relationship with EU immigration. Although EU immigration rose during 2008-10 when employment rates fell, immigration also rose in the last five years when employment rates recovered. Similarly, although wage rates were falling in the period 2008-14 when immigration was rising, wages were still going up in the period 2004-08 as well as in the last year. The problem of falling wages was due to the financial crisis and austerity – not to immigration. … To see if prospects for less skilled UK nationals are associated with EU immigration, we looked at the changes in pay and job rates of the low educated. Our results are unchanged: EU immigration has not harmed local British workers.

Migrants pay more in taxes than they take in benefits. Researchers at Oxford have found that Eastern European immigrants paid in about £15 billion more than they took out in public spending and benefits in the decade up to 2011 (while UK nationals received more than they put in over the same period). Researchers at UCL show that migrants since 2000 have made a net contribution of £25bn.

 

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This entry was posted in borders, economy, EU, global, labour market, lump of labour fallacy, migration, skills, statistics, summary, UK, unemployment, wages, welfare/NHS and tagged , , , , , , , . Bookmark the permalink.

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