National Instituteof Economic and Social Research

EU migration & the UK labour market

Jonathan Portes December 2015www.niesr.ac.ukTwitter: @jdporteswww.niesr.ac.uk

2004: Labour market access for the A8

Myth that decision was based on Dustmann (2003) “forecast”. 3 key drivers:

• Political/foreign policy

• Administrative/practical

• Economic/labour market

But undeniable that flows were much larger than anticipated by government.

Leading in turn to major change in composition of UK workforce and population

But UK still only roughly average in EU terms

However..

What do we know about labour market impacts?

• Dustmann, Frattini and Preston (LPC, 2007)

• Portes and Lemos (2006, 2008)

• Manning, Manacorda and Wadsworth (2006)

• Nickell and Salahadeen (2008)

• Reed and Latorre (2008)

• MAC (2012)

• Lucchino, Portes and Rosazza-Bondibene (2012)

So where do we stand?

Considerable consensus among labour market economists (Wadsworth, 2010, 2014, 2015; CREAM, 2014)

• Little or no impact on unemployment/employment: no study has found statistically significant negative impact of EU migration.

• Probably some relatively small negative impact on wages at the bottom of the distribution

Caveats

• No/small average impact does not preclude significant offsetting positive and negative impacts

• No impact on wages/employment does not exclude significant impacts on labour market institutions, structures and practices (Heather’s talk to follow)

• Relatively little research using post-2010 data especially on wages

New (preliminary) analysis using NiNos & Parliamentary constituencies

New (preliminary) analysis: low pay

National Instituteof Economic and Social Research

EU migration & the UK labour market

Jonathan Portes December 2015www.niesr.ac.ukTwitter: @jdporteswww.niesr.ac.uk