This article appears in the following Oxford Review of Economic Policy issue: LABOUR MIGRATION IN EUROPE [View the issue table of contents]
The labour-market performance of recent migrants
* University of Manchester and IZA, Bonn, e-mail: ken.clark{at}manchester.ac.uk
** University of Surrey and IZA, Bonn, e-mail: s.drinkwater{at}surrey.ac.uk
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Abstract |
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Migrant workers constitute a vital component of many Western labour markets. Although migrants can benefit greatly by moving to higher-wage economies, it is important to compare their labour-market outcomes with those of native-born workers. In this paper, we discuss factors that have been found to influence labour-market success in the receiving country and examine the actual performance of recent migrants to the UK. The UK provides a good case study for conducting such an exercise because of the very large increases in immigration that have been seen over the past decade. We find that labour-market performance varies greatly between migrant groups and that outcomes have changed noticeably following the UK government's decision to allow migrants from Poland and other Central and Eastern European countries more or less free access to the labour market after EU enlargement in 2004.
Key Words: immigrants • employment • earnings • United Kingdom
Material from the Quarterly Labour Force Survey is crown copyright and has been made available by the Office for National Statistics through the Data Archive at the University of Essex. We are grateful to Ken Mayhew and Martin Ruhs for helpful comments. The views expressed in this work and errors therein are those of the authors.
1 We use A8—Accession 8—as the collective term for the Central and Eastern countries that joined the EU in 2004 (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia, and the Slovak Republic), since this term continues to be commonly used in academic and policy circles. In response to public fears regarding the free movement of labour from accession countries, the UK government introduced the Worker Registration Scheme, on which A8 workers in the UK are supposed to register within 1 month of taking up employment in the country (Pollard et al., 2008). Further information on the scheme is provided in section III.
2 There are no restrictions on Bulgarians and Romanians entering the UK as self-employees, as was the case with A8 nationals in the lead up to the 2004 enlargement. See Pollard et al. (2008) for further details.
3 See Venturini and Villosio (2008), elsewhere in this issue, for further details.
4 His results indicate that earnings would be 6.4 per cent greater for immigrants 20 years after arrival.
5 Stark and Fan (2007) argue that the decision of a migrant to move permanently, either alone or with their family, or on a seasonal basis depends on the relative costs of separation and living abroad.
6 Pollard et al. (2008) report that 11 per cent of their sample of Polish return migrants had moved to the UK to learn English, and that this was an important factor in their choice of destination. They also argue that young Polish migrants were motivated by a desire to see the world and to broaden their horizons.
7 A common criticism that is applied to econometric studies of discrimination is that they fail to control for all influences on earnings, especially those which are difficult to measure, such as ability and motivation. Thus they may be erroneously attributing lower earnings to discrimination rather than some other factor.
8 There is also evidence from audit studies that ethnic minorities face lower probabilities of employment (Riach and Rich, 2002).
9 This survey consists of around 250,000 interviews, which is equal to 0.2 per cent of all travellers, including British citizens, at major air, sea, and tunnel ports in the UK. Given the relatively small number of migrants who take part in the survey, the results are subject to relatively high sampling variation, especially if one is interested in particular sub-groups of migrants.
10 Figures from the Accession Monitoring Report suggest that almost 230,000 A8 migrants registered for work in the UK in 2006, while over 266,000 new national insurance numbers were allocated to A8 nationals in that year.
11 A national insurance number is needed to work (paid or self-employment) or claim benefits in the UK. Migrants must make an application to Jobcentre Plus to obtain such a number.
12 A8 nationals are supposed to re-register on the scheme if they start a new job or get a second job.
13 Migrants are likely to underestimate the length of time that they expect to stay in the UK. This is because their answers may be affected by the fact that they are responding to a government questionnaire. Migrants also tend to stay longer than they initially expected (Anderson et al., 2007), possibly because of a lack of knowledge about the UK and the various uncertainties on arrival.
14 Demographic differences between recent male and female migrants are generally not great, so the statistics are not reported separately, although any major differences will be noted in the text.
15 The final quarter of data used in the sample is the third quarter of 2007 since this was the latest available at the time of writing.
16 Years of education are calculated as the age left full-time education minus six. Although school starting ages do vary by country, there is debate over the value of starting formal education at an earlier age (Fredriksson and Ockert, 2005).
17 Anderson et al. (2006) report that a relatively high proportion of A8 migrants working in elementary occupations had only basic levels of fluency in English.
18 Figure 3 shows the increase in employment rates for A8 migrants. It also reports employment rates and other outcomes for migrant groups relative to the UK born for the two periods. The raw differences are shown by the distance between the clear boxes and the vertical line in each panel.
19 Respondents in employment are asked if their jobs are permanent or not. Those stating that their jobs are not permanent are then requested to give a reason from a list that includes seasonal, fixed-term, agency, and casual work.