Thursday, March 02, 2006
Immigration and unemployment
Posted by David Smith at 12:30 PM
Category: Thoughts and responses

I've written before about the curious combination of rising claimant unemployment alongside an increase in employment and conjectured that a possible explanation was that firms preferred migrant workers from Eastern Europe to the existing unemployed. This could have reduced outflows from the claimant count and thus pushed up unemployment.

The Department for Work and Pensions has now investigated this and concluded that this is not the case. Here's a summary of their findings. For the purposes of clarity A10 = the 10 EU accession countries in May 2004 and A8 = those from Eastern Europe:

"Working Paper No. 29
by Nicola Gilpin, Matthew Henty, Sara Lemos, Jonathan Portes and Chris Bullen

The UK granted free movement of workers to nationals of the A10 countries following the enlargement of the European Union in May 2004. This paper describes the key features of migration to the UK since accession and evaluates the impact of migrant flows from these new EU member states on the UK labour market, building on the initial assessment presented in Portes and French (DWP working paper 18).

Between January and December 2005 claimant unemployment in the UK has risen by over 90,000 and it has been suggested that part of the explanation for this rise is the inflow of migrants from the new EU member states. We have found no discernible statistical evidence to suggest that A8 migration has been a contributor to the rise in claimant unemployment in the UK. The evidence presented in this paper supports the view put forward in Portes and French that overall the economic impact of migration from the new EU member states has been modest, but broadly positive, reflecting the flexibility and speed of adjustment of the UK labour market."

This is a link to the full paper.

Comments

Are they the same bunch who forecast immigration from the EU would be 40,000? Its is 300,000 in 2005 alone.

I happen to have come back from Poland a month ago. The flight back was packed - totally packed with polish workers returning to thier jobs in the UK.

Posted by: Mr Micawber at March 7, 2006 10:35 PM