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The impact of the recent migration from Eastern Europe on the UK economy

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  • David Blanchflower
  • Jumana Saleheen
  • Chris Shadforth

Abstract

The recent rise in migration to the UK from eight EU Accession countries (the Czech Republic; Estonia; Hungary; Latvia; Lithuania; Poland; Slovakia; and Slovenia - the A8 countries) has generated a good deal of controversy. How many A8 immigrants are there in the UK? Where did they come from and when? What impact has their influx had on the UK economy and what likely impacts will they have in the future? Most importantly for the Monetary Policy Committee (MPC), what macroeconomic effects have they had? We attempt to address these questions here. First, we examine the change in population in the UK over the last thirty-five years and note that growth is very low by international standards. The UK population has, however, grown at a faster pace since the turn of the millennium, driven most recently by migration from the A8 nations. It appears that the propensity to migrate to the UK from these countries is higher the lower is GDP per capita. Second, we examine the various sources of data that are available on the numbers of A8 immigrants that have arrived in the UK in recent years. There is broad agreement from the various data sources on the numbers involved - half a million workers is likely to be an upper bound for the stock of A8 migrants who are in the UK in late 2006. Many of the new 'migrants' may have stayed for only a short time and then returned home, to possibly return again at a later date. Third, we examine the characteristics of the recent flow of individuals from the A8 countries that have arrived in the UK since accession, and find that they are relatively young, male, have low unemployment rates, lower wages, and high self-employment rates and are especially likely to be in temporary jobs. Finally, we turn to the macroeconomic implications of A8 migration to the UK, and argue that this immigration has made the labour market more flexible and likely lowered the natural rate of unemployment and the NAIRU.

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Paper provided by Monetary Policy Committee Unit, Bank of England in its series Discussion Papers with number 17.

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Date of creation: 2007
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Handle: RePEc:mpc:wpaper:17

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References

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  1. David G. Blanchflower & Andrew J. Oswald, 2000. "Well-Being Over Time in Britain and the USA," NBER Working Papers 7487, National Bureau of Economic Research, Inc.
  2. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  3. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
  4. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
  5. David G. Blanchflower & Richard Freeman, 1997. "The attitudinal legacy of Communist labor relations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(3), pages 438-459, April.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Should never have put me with that woman-gate
    by chris dillow in Stumbling and Mumbling on 2010-04-29 08:55:59
  2. Immigrants & government borrowing
    by chris dillow in Stumbling and Mumbling on 2010-04-01 13:27:10
  3. Immigration & GDP
    by chris dillow in Stumbling and Mumbling on 2009-05-13 09:45:36
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
  1. Katarzyna Budnik, 2008. "Search Equilibrium with Migration: the Case of Poland," National Bank of Poland Working Papers 45, National Bank of Poland, Economic Institute.
  2. Timo Baas & Herbert Brücker, 2012. "The macroeconomic consequences of migration diversion: evidence for Germany and the UK," Norface Discussion Paper Series 2012010, Norface Research Programme on Migration, Department of Economics, University College London.
  3. Dora M. Iakova, 2007. "The Macroeconomic Effects of Migration from the New European Union Member States to the United Kingdom," IMF Working Papers 07/61, International Monetary Fund.
  4. d'Artis Kancs & Julda Kielyte, 2010. "Education in the East, Emigrating to the West?," EERI Research Paper Series EERI_RP_2010_01, Economics and Econometrics Research Institute (EERI), Brussels.
  5. Tremewan, James, 2009. "Beliefs about the Economic Impact of Immigration," TSE Working Papers 09-019, Toulouse School of Economics (TSE).
  6. Kahanec, Martin & Zimmermann, Klaus F., 2008. "Migration in an Enlarged EU: A Challenging Solution?," IZA Discussion Papers 3913, Institute for the Study of Labor (IZA).
  7. David G. Blanchflower & Chris Shadforth, 2007. "Fear, Unemployment and Migration," NBER Working Papers 13506, National Bureau of Economic Research, Inc.
  8. Zaiceva, Anzelika & Zimmermann, Klaus F., 2008. "Scale, Diversity, and Determinants of Labour Migration in Europe," IZA Discussion Papers 3595, Institute for the Study of Labor (IZA).
  9. Vladimir Otrachshenko & Olga Popova, 2011. "Life (Dis)satisfaction and Decision to Migrate: Evidence from Central and Eastern Europe," Working Papers 306, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  10. Ciżkowicz, Piotr & Hołda, Marcin & Sowa, Urszula, 2007. "The new wave of polish migration after EU enlargement - current state, determinants and outlook," MPRA Paper 18596, University Library of Munich, Germany.
  11. Pouliakas, Konstantinos & Roberts, Deborah & Balamou, Eudokia & Psaltopoulos, Dimitris, 2008. "Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions," MPRA Paper 14157, University Library of Munich, Germany, revised 15 Dec 2009.
  12. Ken Clark & Stephen Drinkwater, 2009. "The Labour Market Impact of Recent Immigration on Ethnic Groups in The UK," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 35, pages 4.
  13. Oesch, Daniel, 2009. "Explaining high unemployment among low-skilled workers: Evidence from 21 European and Anglo-Saxon countries, 1991-2006," MPRA Paper 21041, University Library of Munich, Germany.

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