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Migration Advisory Committee: EEA migration has been an overall positive for British economy

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Migration Advisory Committee: EEA migration has been an overall positive for British economy

Migration Advisory Committee: EEA migration has been an overall positive for British economy
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Reuters
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A report by the Migration Advisory Committee (MAC) concluded there is no evidence that migration has reduced the average level of subjective well-being in the United Kingdom.

The report, commissioned by the UK Home Secretary in July 2017, shows how current and future patterns of migration from the European Economic Area (EEA) impacts the British economy.

The MAC found the EEA migration has been an overall positive for the British economy but also recommends there should be no preference for EU citizens after Brexit if UK immigration policy is not included in an agreement with the EU.

The report also suggests the UK should be to make it easier for higher-skilled workers, than lower-skilled, to migrate to the UK moving forward.

Impacts

Labour Market

There is little evidence of substantial impacts of EEA immigration on the overall employment opportunities of UK-born workers. Where some effect is found, lower-skilled UK-born workers are more likely to lose out while higher skilled workers tend to benefit.

The report shows there is no evidence that EEA migration has reduced wages for UK-born workers on average. There is also evidence that migration has reduced earnings growth for the lower-paid and raised it for the higher-paid.

MAC research shows there is little or no overall impact of immigration on the level of employment or unemployment of existing workers already working in the United Kingdom. The report also states that studies from other developed economies tend to reach similar conclusions on the impact of immigration on employment and unemployment in the UK.

Productivity, Innovation, Investment and Training

There is much uncertainty about the impact of immigration on productivity. Evidence shows that on average, immigration has a positive impact on productivity.

Recently, the UK has suffered from weak productivity growth in recent years - as an example – Germany, the European country with the largest foreign-born population, had a level of productivity around 35% higher than the UK in 2016.

There is also evidence to suggest that the impact is larger for high-skilled migrants than lower-skilled migrants. High-skilled immigrants are known to make positive contributions to innovation levels in the receiving country.

MAC found no evidence that migration has had a negative impact on the training of the UK-born workforce, in-fact, the report shows that immigration raises productivity overall. Moreover, there is some evidence to suggest that skilled migrants have a positive impact on the quantity of training available to the UK-born workforce.

Consumer and House Prices

Migration may affect prices if it alters the balance between supply and demand of goods and services but if supply is affected more than demand then prices might be expected to fall.

Migrants coming from the New Member States and non-EEA, have reduced prices of personal service, more so in middle and lower-skilled personal services.

This research exploited the fact that the rise in the share of migrants has been larger in some regions than others, and so essentially compares price changes in regions and occupations with larger and smaller changes in the share of migrants

The MAC report also suggests that migration has increased house prices because the increase in population leads to an increase in demand for housing.

A recent report from the Ministry of Housing, Communities and Local Government (MHCLG) should that the increase in demand from immigration raised house prices by 20% from 1991-2016.

Immigration will naturally increase the demand for social housing and if the supply of social housing is not very responsive to changes in demand, it could, in turn, reduce the access to social housing for UK-born citizens.

Public Services

Research shows that EEA migrants pay more in taxes than they receive in benefits, while also contributing much more to the health service and the provision of social care in financial resources and work than they consume in services.

Across all EEA migrants, the average level of household income at which taxes exceed benefits is estimated to be about £30,000. While the average UK salary overall is just over £27,000 according to the Office for National Statistics.

There is no evidence to suggest that migration has reduced the quality of health care in a country that prides itself on the National Health Service (NHS). Health and social care workers from the EEA have increased although these sectors employ greater numbers of non-EEA migrants.

In education, children with English as an additional language outperform native English speakers on average. There was also no evidence that migration has reduced parental choice in schools in the educational opportunities of UK-born children.

Community

Migration role in enhancing or reducing the feeling of wellbeing in communities is difficult to measure.

This MAC report fell In line with previous research as it was found again that migration does not impact crime and there is no evidence to suggest that migrants are linked to any increases in crime in England and Wales.

According to police figures, criminal offences rose had a year-on-year increase of 14%, with knife crime increasing by 21%, while gun crimes rose by 20%.

The report also found no evidence that migration reduced the average level of subjective well-being in the UK. The MAC even found a hint of a positive effect for those with more positive views of migrants and a negative effect for those with negative views.

Policy Recommendations

The Migration Advisory Committee report concluded that there is no evidence that migration has reduced the average level of subjective well-being in the UK.

The MAC’s recommendations about migration policy aimed at the objective of maximizing the welfare of the resident population, while bearing in mind the impacts are likely to vary across individuals, sectors, and regions.