Migration and the UK economy August 2014

Question 1: Do you agree that migration to the UK can be expected to be beneficial for the average income of current UK inhabitants in the upcoming decade?

Question 2: Do you agree that current government policies with respect to non-EU migration (including policies on students, skilled workers, and family migration) are effective in maximizing the gains to the economy from migration while minimizing any possible negative impact to specific groups?

Summary

This month’s survey focuses on the impact of migration on the UK economy and the effectiveness of current government migration policies. Among respondents to the fifth monthly survey of the Centre for Macroeconomics (CFM), there is overwhelming support for the view that migration will increase the average income of current UK inhabitants. Moreover, the panel of experts thinks that current government policies are not effective in attracting the ‘best and brightest’ – in fact, they may even be doing the opposite.

The impact of migration on the average income of current UK inhabitants

As in many other countries, migration continues to be a contentious issue in the UK. In particular, the scale of immigration from the European Union is likely to be an increasingly important issue should the UK hold a referendum on its EU membership in 2017.

Dustmann and Frattini (2013) report that the immigrant population has grown substantially, from about 3.8 million in 1995 to around 7.6 million in 2011. In contrast, the native UK population has increased by about one million from 53.4 to 54.4 million. Moreover, during the last ten years, a large fraction of UK employment growth is accounted for by foreign nationals. This is especially the case for the period following the 2004 expansion of the EU.[2]

With such a large inflow of foreign nationals, it is natural to ask what the consequences are for the UK economy and whether particular groups in the UK are possibly negatively affected. Using data from the European Social Survey, Boeri (2010) documents that 45% of UK respondents think that 'immigration [is] bad for [the] country's economy'.

However, a recent report by the Migration Advisory Committee argues 'that migrant workers over the last 20 years have not had a major impact on the pay of British workers, on UK employment, the wider UK economy, or areas such as housing, healthcare, crime, education and welfare benefits.'[3] The report goes on to point out that the effect of migration on low-skilled workers may have been more significant at the local level, as such immigration tends to be concentrated in certain areas.

This month’s first question focuses on the impact of migration on the average income of current UK inhabitants.

Question 1: Do you agree that migration to the UK can be expected to be beneficial for the average income of current UK inhabitants in the upcoming decade?

Summary of responses

Of the 44 panel members, 32 answered this question. An overwhelming majority agree with the question. In fact, there has not been such a strong consensus among panel members in any of the previous four surveys. To be precise, 34.3% strongly agree, 50% agree, 6.3% neither agree nor disagree, 9.4% disagree, and nobody strongly disagreed. Answers weighted by confidence level give a similar distribution.

Several of the respondents who agree point to the benefits for the UK labour market. Richard Portes (London Business School) argues that ‘properly regulated immigration’ can increase the flexibility of the UK labour market and alleviate specific labour shortages. Martin Ellison (Oxford) reminds us of the ‘lump of labour fallacy’ – that is, the number of jobs is not fixed so that immigration increases the overall number of jobs rather than takes jobs from natives.

Jonathan Portes (NIESR) notes that ‘immigrants to the UK, both from within and outside the EU, are more likely to be of working age than current UK inhabitants and more likely to have higher skills and qualifications. As a result, the spillover effects and complementarities mean that immigration is likely to result in higher productivity for both new and existing workers and hence higher incomes.’[4]

Several of the respondents illustrate their view with their experience in their own sector, higher education. Michael McMahon (Warwick) says that foreign students not only bring revenues to the UK education sector but also ‘a valuable global perspective.’ Morten Ravn (UCL) argues that the higher education sector ‘would die without migrants’.

The skill level of migrants attracted to the UK in next few years is an important factor for those panel members that disagree with the question. Nicolas Oulton (LSE) thinks that ‘the bulk of migrants will be relatively unskilled’, and adds that, although small, the effect of immigrants on wages and employment of native British is negative. Patrick Minford (Cardiff) also believes that UK migration is shifting towards the unskilled. He argues that this lowers existing UK residents’ income because the permanent income these workers receive in the UK is less than their marginal product – that is, the amount that they add to UK GDP.

Quite a few respondents (among those who agree and disagree) suggest that the question focuses on a narrow concept, namely the average income of current UK inhabitants. Migration is likely to affect many other aspects of society, such as the income distribution, potential culture clashes, congestion in the housing market, and capacity in infrastructure and public goods provision.

The effectiveness of current UK government migration policies

In 2010, the current Coalition Government promised to drive down net migration to 'tens of thousands' by the next election. In the last few years, net migration has indeed been lower than in the decade prior to the financial crisis. In 2013, however, net migration rose to 212,000 from 177,000 the previous year. The Government has also emphasized that curbs on migration should not prevent UK firms attracting the ‘best and brightest’. Nevertheless, a recent report shows that the total number of highly educated recent migrant workers decreased from 338,000 in 2007 to 242,000 in 2013.[5]

This month’s second question focuses on the question of whether government policies can be expected to be effective.

Question 2: Do you agree that current government policies with respect to non-EU migration (including policies on students, skilled workers, and family migration) are effective in maximizing the gains to the economy from migration while minimizing any possible negative impact to specific groups?

Summary of responses

Of the 44 panel members, 30 responded. 70% of the respondents either disagree or strongly disagree, only 6.7% agree or strongly agree, and 23.3% neither agree nor disagree. Weighing the answers with confidence level creates greater uniformity, increasing the fraction that either disagrees or strongly disagrees to 77%.

In their comments, the respondents do not shy away from using strong language. Government policies are described as ‘a politically- and PR-driven mess’ by David Cobham (Heriot- Watt), and as ‘flawed and unwieldy’ by Kate Barker. John Driffill (Birkbeck) writes that ‘their policies are illiberal, short-sighted and damaging to the economy and society. It is appalling that this electorally weak administration appeases UKIP and the Tory right wing in its efforts to cling on. Its policies on immigration have nothing to do with the gains to the economy (or effects on society) and everything to do with staying in power’.

Using more moderate language, these sentiments are echoed by other respondents. A recurring point made is that current government policies make it difficult for bright students who study in the UK to take a job in the UK after graduation. Luis Garicano (LSE) writes ‘Unlike other English-speaking countries, Britain makes little effort to discriminate in favour of those who are likely to be most beneficial for the economy as a whole. As a result, bright Chinese students finishing their studies are forced to go home, when most likely their presence would be positive for the economy as a whole.’ Silvana Tenreyro (LSE) says that ‘there is still untapped potential in, for example, university students from non-EU countries – higher education 'exports' could increase far more.’

Another point made by several respondents is that existing government policies impose costs on businesses either because of red tape (Simon Wren-Lewis, Oxford) or the inability to recruit higher skilled workers (David Smith, Sunday Times).

Several panel members point out that the difficulty for skilled foreign students wanting to stay in the UK after graduation is also likely to have negative effects on the UK education sector itself.

Although the respondents are very negative about existing government migration policies, several respondents suggest that it would be beneficial if there were an effective policy that could target high-skilled workers.

Not all respondents agree. Martin Ellison comments that he does ‘not have great confidence in the government being able to identify which immigrants would be most beneficial to the UK economy. Past experience with governments attempting to pick ‘champion’ industries to support through subsidies and tax breaks has been disappointing, and there is little reason to believe that the government would be any better picking ‘champion’ people to allow into the UK either’.

The issue of migration is likely to remain a sensitive political issue. Giancarlo Corsetti (Cambridge) says ‘the UK is attractive as a destination because of a dynamic labour market and a relatively inclusive welfare state. For these very reasons, however, one may expect political opposition to remain strong.’

 

References

Boeri, Tito (2010) ‘Immigration to the Land of Redistribution’, Economica 77: 651–687.

Campbell, Stuart, Jacquie Cooper and Jon Simmons (2014) ‘Employment and Occupational Skill Levels Among UK and Foreign Nationals (available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/282503/occ108.pdf).

Dustman, Christian and Tommaso Frattini (2013) ‘The Fiscal Effects of Immigration to the UK’, VoxEU, 13 November 2013 (available at http://www.voxeu.org/article/fiscal-effects-immigration-uk).

Rolfe, Heather, Cinzia Rienzo, Mumtaz Lalani and Jonathan Portes (2013) ‘Migration and Productivity: Employers’ Practices, Public Attitudes and Statistical Evidence’ (available at http://niesr.ac.uk/sites/default/files/publications/Migration%20productivity%20final.pdf).

 

Notes

[1] Detailed results are available at http://www.cfmsurvey.org.

[2] See Campbell et al (2014), which reports that 'between the first quarter of 2004 (the last quarter before the accession) and the first quarter of 2008 (the last quarter before the onset of recession) foreign nationals accounted for 78 per cent of the 1.1 million total rise in employment.'

[3] See the report by the Migration Observatory, ‘Highly Skilled Migration to the UK 2007-2013: Policy Changes, Financial Crises and a Possible ‘Balloon Effect’?’ (available at http://www.migrationobservatory.ox.ac.uk/sites/files/migobs/Report-Highly_skilled_migration.pdf).

[4] More information can be found in Rolfe et al (2013).

[5] See the report by the Migrant Advisory Committee, ‘Migrants in Low-skilled Work: The Growth of EU and Non-EU Labour in Low-skilled Jobs and its Impact on the UK (available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/333083/MAC-Migrants_in_low-skilled_work__Full_report_2014.pdf).

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How the experts responded

Impact of migration on current UK inhabitants

Participant Answer Confidence level Comment
Giancarlo Corsetti University of Cambridge Agree Not confident
The prospects for the next few years will depend on which factors will play a major role in determining migratory flow and factor mobility. On the source countries, regional growth in some areas of Europe and Asia may reduce net migratory pressure. But regional conflicts may provide a counterveiling effects. On the demand side, the UK is attractive as destination because of a dynamic labor market and a relatively inclusive welfare state. For these very reasons, however, one may expect political opposition to remain strong.
Wouter Den Haan London School of Economics Agree Confident
Being an immigrant myself I may be biased. But living in London I see the key role that immigrants play in all kinds of different sectors. So my own experience back up what serious research has found.
Vicky Pryce Centre for Economics and Business Research (CEBR) Strongly Agree Confident
Angus Armstrong National Institute of Economic and Social Research Strongly Agree Very confident
On average - yes, strongly agree. Distributional consequences are also important. They maybe hard to detect statistically, but they important to analyze - whether big or small.
Nicholas Oulton London School of Economics Disagree Not confident
My answer, that the average income of current inhabitants of the UK will be lowered by further migration over the next decade, is based on my judgement that the bulk of the migrants will be relatively unskilled. They will come predominantly either from Commonwealth countries or from the poorer parts of the EU. So the average level of human capital per capita in the UK economy will fall. Of course this does not mean that everyone's income will fall (relative to a low migration world) since the highly skilled and those who purchase the services of unskilled labour will benefit. I am aware that a number of studies have found that the impact of migration on wages and employment of the native British is small. However, there does not seem to be much doubt about the sign of the effect. In addition the studies do not consider all the costs associated with migration, what one might call the costs of integration. The latter does not just mean additional schools and housing but also the policing and security costs of dealing with ideologies which are fundamentally at variance with traditional British values (not to mention the EU's Copenhagen principles).
Wendy Carlin University College London Agree Confident
Richard Portes London Business School and CEPR Strongly Agree Very confident
Properly regulated immigration increases flexibility of UK labour market. Specific labour shortages are alleviated, and it is possible to run the economy at a higher level of demand without wage inflation. That was a key to UK growth in the decade leading up to the crisis.
Jagjit Chadha National Institute of Economic and Social Research Strongly Agree Very confident
Patrick Minford Cardiff Business School Disagree Confident
Immigration is increasingly problematic in the UK because of the accession of several poor countries to the EU. Unskilled workers with low incomes in these countries can obtain access to an extremely generous first world welfare state which gives benefits to around half of the employed labour force besides those unemployed. Thus their expected permanent income in the UK will exceed their marginal product, causing a net reduction in existing UK residents' income. Against this there are skilled immigrants whose marginal product is high (eg professors of economics); from these there will be a surplus, in the form of tax revenue, for existing UK residents. It seems to me that the downside from the former is now prospectively greater than the upside from the latter. To these considerations must now be added rising congestion costs of higher population; these generally are not well priced into the choices facing immigrants. A further point is that certain sections of the population experience the costs of immigration disproportionately, while other segments gain the benefits but do not compensate the losers; this creates political tension around this problem,
Alan Sutherland University of St. Andrews Agree Confident
Luis Garicano London School of Economics Agree Confident
The key is the word income in the question ("beneficial for the average income"). The main costs of inmigration (which I would expect to increase sharply) will be social, related to culture clashes and to integration of the inmigrants.
David Smith Sunday Times Disagree Confident
Over the very long term, immigration should boost per capita GDP. At the moment, however, we appear to be in a period when immigration has squeezed the incomes of lower-paid workers, and thus helped restrict the rise in median incomes.
Kate Barker British Coal Staff Superannuation Scheme Agree Not confident
Very much depends - migration that comes and goes could inhibit the development of UK labour force and put stress on infrastructure.
John Driffill Birkbeck College, University of London Agree Confident
A complex issue. More inward migration -- more workers entering the country -- would, in a simple world, lower the rewards to labour and raise the return on capital. Wages and salaries per worker would fall but yield on capital rise. It's made more complex by the effects of additional workers on the governments tax revenue and benefit payments: immigrants contribute to taxes more than they raise benefit payments, reduce the problem of an aging population and pensions. More workers entering may raise the proportion of highly skilled and entrepreneurial people in the population and thereby raise average incomes. Benefits of migration may be offset partly as more workers impose more pressure on infrastructure. In any case, some groups in the population will gain from migration, while others lose. All the evidence is that migration has been beneficial. Allowing more migration into the UK is just part of a bigger picture in which countries generally adopt more liberal poliicies towards movement of people. The UK's policies can't be taken in isolation. We all enjoy more freedom. Migration is another issue on which the economic effects are only part of the story and arguably not the most important.
Michael McMahon University of Oxford Agree Confident
Immigration, especially higher skilled workers who make up over half of the migration inflow from abroad recently, brings benefits to the UK labour market that make it more attractive for firms to locate, remain or expand in the UK. This has benefits for activity and employment of those in the UK beyond the immigrants - the net migration numbers for work, as measured by work visas issued (+156,000 in the year to March 2014) are small relative to the total pool of employment in the UK (around 30m people). Of course, I am happy to acknowledge that my view may be considered biased because, like many others responding to this survey, I am part of the pool of UK-based immigrants (since 2000). Of course, as an EU citizen I have simply moved to another part of the union and so should be treated in the same was a Scot moving to London, or someone from Wales moving to Northern Ireland. However, often the political discussion of migration does not treat these cases equally as the public discussion often alludes to migration from the EU as the type of migration that is displacing low-skilled workers in the UK. Moreover, I see other benefits from immigration. Working in third level education I see large numbers of foreign students who come to the UK to study and these students benefit the sector both financially and also by bringing a valuable global perspective to the classroom.
Paolo Surico London Business School Agree Confident
John VanReenen London School of Economics Strongly Agree Extremely confident
Paul De Grauwe London School of Economics Agree Very confident
Morten Ravn University College London Strongly Agree Extremely confident
If properly managed, immigration can contribute very positively to the uk economy. There is strong self selection amongst migrants and they come because of opportunities. My own sector (university) would die without migrants.
Martin Ellison University of Oxford Strongly Agree Very confident
Migrants entering the UK are typically young, healthy and wanting to work. Whilst there may be problems of displacement in specific sectors or specific geographical areas, the overall picture is of increased average income due to incoming migrants. The ‘lump of labour fallacy’ tells us that the number of jobs is not fixed so, rather than take jobs from natives, the immigration increases the overall number of jobs.
Fabien Postel-Vinay University College London Strongly Agree Very confident
Jonathan Portes KIng's College, London Strongly Agree Extremely confident
Immigrants to the UK, both from within and outside the EU, are more likely to be of working age than current UK inhabitants and are more likely to have higher skills and qualifications. As a result, spillover effects and complementarities mean that immigration is likely to result in higher productivity for both new and existing workers and hence higher incomes. [See Rienzo (2013) http://niesr.ac.uk/publications/migration-and-productivity-employers%E2%80%99-practices-public-attitudes-and-statistical ]. In addition, since recent immigrants have a more positive fiscal balance than natives, migration will have a positive impact on native welfare (natives will see lower taxes or higher public service spending for a given deficit/GDP path).
Michael Wickens Cardiff Business School & University of York Agree Confident
Migration that is in response to demand will increase both GDP and GDP per capita, but otherwise migration is likely to raise GDP but reduce GDP per capita and the average wage, especially in the medium term. Migration from the EU reflects its greater wage rigidity than the UK and hence the UK's greater ability to absorb increases in labour supply. More important for the UK than the average wage is the reduced standard of living due to much increased pressure on public services,benefits, the demand for housing and concreting over the countryside.
Gianluca Benigno London School of Economics Agree Confident
Silvana Tenreyro London School of Economics Strongly Agree Confident
Francesco Caselli London School of Economics Agree Very confident
David Cobham Heriot Watt University Agree Not confident
Any effect on average incomes will be very small.
Christopher Martin University of Bath Strongly Agree Very confident
History shows that migrations tend to benefit the host country so long as skilled workers comprise a substantial part of the new migrants. This is true of the current large wave of migraton to the UK, where the migrant population has doubled over the past five years and now comprises over 10% of the population. The pace of globalisation is unlikely to slow down. With globalisation, either workers move to where the best jobs are, or jobs move to where the best workers are. Stopping migration into the UK, even if that were possible, would result in a migration of high skill jobs out of the country. That would be a disaster.
Ethan Ilzetzki London School of Economics Agree Confident
Andrew Mountford Royal Holloway Neither agree nor disagree Extremely confident
The only answer to this question is "it depends". If immigration is a result of under-investment in human capital in the destination country then this immigration will be playing its part in a process with adverse long run implications for economic wellbeing in the destination economy. On the other hand, if instead, immigration is a complement to investment in human capital by the destination country then it will be playing a part in a healthy process which will be of long run benefit to the destination economy. This is very straightforward. For illustration, suppose, for the sake of argument that becoming a medical doctor is a good thing for individuals and society- it increases people’s human capital and trains them for a socially useful job with high job satisfaction and significant externalities at the individual and societal level , so that its social and private marginal products significantly dominate the costs of training. Now if an economy is importing doctors and not spending the saving by investing in other equivalent socially beneficial sectors then the original inhabitants of the economy will not be trained and so will not benefit from investment in them and so will end up ultimately in a worse position. If on the other hand an economy is importing doctors to create a vibrant world class heath care sector which creates new jobs and thereby increases the demand and opportunities for its original inhabitants to become medical doctors then ultimately they will end up in a better position. Beyond this example about medical doctors, the general point, which I think it is well recognised by academic economists, is that one needs to look at the underlying dynamic process behind a phenomenon if one is to fully understand its implications. From my reading of the immigration policy debate this has not been done anything like sufficiently .
Costas Milas University of Liverpool Neither agree nor disagree Not confident
Simon Wren-Lewis University of Oxford Agree Very confident
Tim Besley London School of Economics Agree Confident

Impact of current migration policies

Participant Answer Confidence level Comment
Giancarlo Corsetti University of Cambridge No opinion Confident
Wouter Den Haan London School of Economics Disagree Confident
Vicky Pryce Centre for Economics and Business Research (CEBR) Disagree Confident
Nicholas Oulton London School of Economics Neither agree nor disagree Confident
It is difficult to see how these policies could be effective, at least in the short term, given the constraints under which they have to operate. We should have adopted the Australian system many years ago but we didn't. (Their policy on family migration is much tougher than ours for example). But over a long enough period and if carried through consistently they should have an impact in what I argue is the right direction, namely reducing unskilled migration from non-EU countries. Of course it would be better if we could control unskilled EU migration as well.
Richard Portes London Business School and CEPR Strongly Disagree Very confident
Policies are deterring and restricting non-EU students and high-skill potential immigrants, also making it more difficult for students to work in the UK after taking their degrees.
Jagjit Chadha National Institute of Economic and Social Research Disagree Confident
Patrick Minford Cardiff Business School Strongly Disagree Extremely confident
Because of the pressures exerted by very high levels of uncontrolled EU net migration government policy has targeted non-EU migration in order to reduce overall net migration to 'tens of thousands'. This was never feasible and has not been achieved; net migration has risen above 200,000. The result has been problems for students getting study visas, for families wishing to be reunited, and for firms obtaining skilled workers. In most countries outside the EU immigration control is exerted across all foreign entrants. Within the EU few countries are the magnet that the UK is because of its relatively free and dynamic labour market. Thus the UK has a considerable problem with immigration control from within the EU and its single labour market. The achievement of across-the-board immigration control which does not unduly penalise particular groups will require the UK to derogate from the single EU labour market.
Alan Sutherland University of St. Andrews Disagree Confident
Luis Garicano London School of Economics Disagree Confident
Inmigration policy should be biased towards high skilled inmigrants. Unike other English-speaking countries, Britain makes little effort to discriminate in favor of those who are likely to be most beneficial for the economy as a whole. As a result, bright Chinese students finishing their studies are forced to go home, when most likely their presence would be positie for the economy as a whole.
David Smith Sunday Times Disagree Confident
Government policy on non-EU migration has had a detrimental effect, if only at the margin, on the ability of business to attract the skilled workers it needs and universities to attract the best students.
Kate Barker British Coal Staff Superannuation Scheme Disagree Very confident
Any anecdote on the way visas are applied suggests the system is flawed and unwieldy.
John Driffill Birkbeck College, University of London Strongly Disagree Confident
The rhetoric of the current UK government on immigration is deplorable. Their policies are illiberal, short-sighted and damaging to the economy and society. It is appalling that this electorally weak administration appeases UKIP and the tory right wing in its efforts to cling on. It's policies on immigration have nothing to do with the gains to the economy (or effects on society) and everything to do with staying in power.
Michael McMahon University of Oxford Agree Confident
To the extent that most of the immigration benefits come from these groups, those policies seem like they aim to focus on the areas where most benefits would be reaped. Of course, even these types of migrants can impose congestion costs on the economy, especially where they are geographically concentrated in a few areas and when these areas are already under strain in terms of infrastructure and housing (such as London). It is difficult to isolate the effect of these migrants on house prices and other forms of congestion but government policies should also ensure that efforts are underway to address these costs at the same time.
Paolo Surico London Business School Neither agree nor disagree Not confident
John VanReenen London School of Economics Strongly Disagree Extremely confident
Paul De Grauwe London School of Economics Disagree Very confident
Morten Ravn University College London Disagree Extremely confident
Martin Ellison University of Oxford Disagree Confident
I do not have great confidence in the government being able to identify which immigrants would be most beneficial to the UK economy. Past experience with governments attempting to pick “champion” industries to support through subsidies and tax breaks has been disappointing, and there is little reason to believe that the government would be any better picking “champion” people to allow into the UK either. Another problem is the bureaucratic burden behind a selective system. Current policy with regard to entry visas for non-EU students is a good example, with many of our best universities reporting problems obtaining visas for very bright students.
Fabien Postel-Vinay University College London Disagree Confident
Jonathan Portes KIng's College, London Disagree Very confident
Taking the categories in the question in turn. 1) On students, policy changes have resulted in significant reductions in international students in the FE sector; while there was undoubtedly some abuse, this also translates into lower exports. In HE, universities have largely adapted to the new system for undergraduates, but the abolition of the Post-Study Work Route means the UK is deliberately excluding a significant group of potential highly skilled and well integrated immigrants with good labour market prospects; this is entirely irrational from both an economic and social perspective. 2) On skilled workers, the system is now considerably more bureaucratic, although the expansion of the ICT route and the avoidance of a binding numerical constraint has mitigated the direct economic consequences so far. 3) On family migration, new income rules have probably increased the average income/skill level of family migrants, although obviously some UK citizens have suffered serious personal consequences. More broadly, of course, the obvious contradiction between the government's "open for business" rhetoric and its rhetoric and policy on non-EU migration has clearly not helped efforts to deepen economic links with some non-EU countries (India, in particular) although it is not possible to quantify any such impacts.
Michael Wickens Cardiff Business School & University of York Strongly Disagree Extremely confident
The issue is social rather than economic. Large parts of the UK are becoming unrecognisable as a result of many years of lax migration policies and low cultural assimilation due to multi-culturalism. Priority should be given to the highly skilled. Assimilation is essential.
Gianluca Benigno London School of Economics Neither agree nor disagree Not confident
Silvana Tenreyro London School of Economics Strongly Disagree Very confident
There is still untapped potential in, for example, university students from non EU countries---higher education 'exports' could increase far more; similarly, skilled workers with great creative capacity end up opting for the US or Canada.
Francesco Caselli London School of Economics Disagree Confident
David Cobham Heriot Watt University Disagree Confident
The policies are a politically- and PR-driven mess.
Christopher Martin University of Bath Strongly Agree Very confident
The social and economic pressures caused by the doubling of the migrant population over the past 5 years mean that all leading politicians feel the need to support further restrictions on unskilled immigration. Low skilled migrants are perceived (the evidence suggests, wrongly) as taking jobs from UK workers, holding down wages and increasing pressure on social services. Given this, support for high-skilled workers is the best way forward. Although the current government has an official policy of supporting skilled immigration,I doubt that this how it feels to many would-be high skill migrants
Ethan Ilzetzki London School of Economics Neither agree nor disagree Not confident
Andrew Mountford Royal Holloway Neither agree nor disagree Extremely confident
The only answer to this question is "it depends". If high skilled immigration is a result of under-investment in human capital in the destination country then this immigration will be playing its part in a process with adverse long run implications for economic wellbeing in the destination economy. On the other hand, if instead, high skilled immigration is a complement to investment in human capital by the destination country then it will be playing a part in a healthy process which will be of long run benefit to the destination economy. This is very straightforward. For illustration, suppose, for the sake of argument that becoming a medical doctor is a good thing for individuals and society- it increases people’s human capital and trains them for a socially useful job with high job satisfaction and significant externalities at the individual and societal level , so that its social and private marginal products significantly dominate the costs of training. Now if an economy is importing doctors and not spending the saving by investing in other equivalent socially beneficial sectors then the original inhabitants of the economy will not be trained and so will not benefit from investment in them and so will end up ultimately in a worse position. If on the other hand an economy is importing doctors to create a vibrant world class heath care sector which creates new jobs and thereby increases the demand and opportunities for its original inhabitants to become medical doctors then ultimately they will end up in a better position. Beyond this example about medical doctors, the general point, which I think it is well recognised by academic economists, is that one needs to look at the underlying dynamic process behind a phenomenon if one is to fully understand its implications. From my reading of the immigration policy debate this has not been done anything like sufficiently .
Costas Milas University of Liverpool Neither agree nor disagree Not confident
Simon Wren-Lewis University of Oxford Strongly Disagree Very confident
Targets based on NET migration make no sense. Including students makes no sense, and harms the economy. The policy seems to be to make getting visas as difficult as possible, which in cases I know can cause a lot of individual distress, as well as forcing needless red tape on individuals and businesses.
Tim Besley London School of Economics Neither agree nor disagree Confident