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The Impact of Brexit on UK Immigration and Labour Supply: Evidence from Synthetic Differences in Differences

Author

Listed:
  • Portes, Jonathan

    (King's College London)

  • Springford, John

    (Centre for European Reform)

Abstract

This paper estimates the causal impact of Brexit on migrant employment in the United Kingdom using a synthetic difference-in-differences (SDID) framework. We construct a counterfactual trajectory for the UK based on a weighted combination of comparable European economies and compare post-referendum outcomes to this benchmark. Rather than analysing migration flows, which are subject to substantial revision and comparability issues, we focus on employment stocks of foreign-born workers using administrative payroll data. We find that Brexit led to a large compositional shift in migrant labour supply and a modest change in its overall size. Employment of EU-origin workers declined substantially relative to the counterfactual following the 2016 referendum and the subsequent end of free movement. However, this decline was more than offset by a sharp increase in employment among non-EU workers after the introduction of the post-Brexit immigration system in 2021. By 2024, total foreign-born employment is about 0.6% higher than in the absence of Brexit. Brexit did not reduce migrant labour supply as widely expected, but instead reconfigured its composition, and highlight the interaction between migration policy and labour demand.

Suggested Citation

  • Portes, Jonathan & Springford, John, 2026. "The Impact of Brexit on UK Immigration and Labour Supply: Evidence from Synthetic Differences in Differences," IZA Discussion Papers 18478, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18478
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    References listed on IDEAS

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    1. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    2. Di Iasio, Valentina & Wahba, Jackline, 2023. "Expecting Brexit and UK migration: Should I go?," European Economic Review, Elsevier, vol. 157(C).
    3. Jonathan Portes & John Springford, 2023. "The impact of the post-Brexit migration system on the UK labour market," Contemporary Social Science, Taylor & Francis Journals, vol. 18(2), pages 132-149, March.
    4. Campo Francesco & Forte Giuseppe & Portes Jonathan, 2024. "The Impact of Migration on Productivity: Evidence from the United Kingdom," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 24(2), pages 537-564, April.
    5. Portes, Jonathan, 2024. "Unintended Consequences? The Changing Composition Of Immigration To The United Kingdom After Brexit," National Institute Economic Review, National Institute of Economic and Social Research, vol. 268, pages 63-78, May.
    6. Jonathan Portes, 2022. "Immigration and the UK economy after Brexit," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(1), pages 82-96.
    7. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 145-173.
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    More about this item

    Keywords

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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