ARE IMMIGRANTS A DRAIN ON THE UK?

By Valentina Magri

Immigration into the UK

A missed goal and a missing report. They are the main drivers of a revitalised debate over immigration in the UK.

The missed goal concerns net flow of migrants. According to recent data over migration in the UK, David Cameron is unlikely to meet his migration target of under 100,000 migrants by 2015. The Office for National Statistics estimated a net flow of 212,000 migrants to the UK in the 12 months to September 2013 (compared to 154,000 in the same period of the previous year).

The Conservative-led government aims to reduce the number of migrants because they displace British workers. In particular, the Government cited research from the Migration Advisory Committee (MAC) saying that 23 English workers are left unemployed for every 100 arrivals. But that didn’t quite tell the whole picture.

A missing study over the same topic from civil servants was completed last year but was not made public until March 6, 2014. The report found migration does not displace natives from the labour market, and although there are short-term impacts during recession, it was unable to find any substantial evidence to suggest migrants are hurting the UK economy.

In order to gain a better comprehension of the issue of migration to the UK, it is worth analysing two dimensions of immigration in Britain: labour market and fiscal effects.

Migrants and jobs for Brits

The main news contained in the hidden report is that “there is relatively little evidence that migration has caused statistically significant displacement of UK natives from the labour market when the economy has been strong”, while some displacement have happened during the crisis, concentrated on low skilled natives.

What is clear is that the estimates of the displacement are far from those cited by the government, which is why the PM is accused of not having published the report. “It doesn’t apparently tell the story and the rhetoric that they (the Conservative Party) want to promote”, Labour immigration spokesman David Hanson told BBC TV.

A recent study by Dustmann and Frattini addresses this topic. The economists study immigrants’ net fiscal contribution over the period from 1995 to 2011, distinguishing recent immigrants (those arriving since the early 2000s), immigrants from EEA (European Economic Area) and not EEA migrants.

The results are incredible: rather than being a drain on the British fiscal system, recent immigrants have made substantial net contribution to English public finances. Indeed, migrants are less likely to receive benefits or tax credits with respect to migrants. Even comparing similar natives and migrants (in terms of age, gender composition and education), the latter are 21 per cent less likely than natives to receive benefits.

Why?

Well, the researchers note that migrants have an educational achievement higher than natives and that most of immigrants arrive in the UK after completing their education abroad. Thus, Britain enjoys people ready to work and well educated without sustaining the costs of providing that level of education. Finally, many migrants come back home later, therefore spending their later and less productive years elsewhere.

These effects, founded in evidence, simply do not support views in the UK that migrants are a drain on the country. The only migration we need is one to a better informed debate.

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