IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/13506.html
   My bibliography  Save this paper

Fear, Unemployment and Migration

Author

Listed:
  • David G. Blanchflower
  • Chris Shadforth

Abstract

UK population growth over the past thirty-five years has been remarkably low in comparison with other countries; the population grew by just 7% between 1971 and 2004, less than all the other EU15 countries. The UK population has grown at a faster pace since the turn of the millennium. Both the inflow and outflow rates have risen, but the inflow rate has risen more rapidly recently, with an influx of workers from Eastern European. The propensity to come to the UK to work is higher the lower is a) GDP per capita b) life satisfaction in each of the East European countries. There is reason to believe that the majority of those who have arrived in the UK from Eastern Europe have not come permanently. When surveyed only 9% said they expected to stay for more than two years. Hence, in our view it is inappropriate to call them migrants, whereas in fact they should more appropriately be considered temporary or guest workers. There is evidence that, as a result of this increase in the flow of workers from Eastern Europe, the fear of unemployment has risen in the UK which appears to have contained wage pressures. We argue that the influx of workers from Eastern Europe has tended to increase supply by more than it has increased demand in the UK (in the short run). We argue that this has acted to reduce inflationary pressures and reduce the natural rate of unemployment.

Suggested Citation

  • David G. Blanchflower & Chris Shadforth, 2007. "Fear, Unemployment and Migration," NBER Working Papers 13506, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:13506
    Note: LS EFG ME
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w13506.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The impact of immigration on the structure of male wages: theory and evidence from Britain," LSE Research Online Documents on Economics 19797, London School of Economics and Political Science, LSE Library.
    2. Timothy J. Hatton & Massimiliano Tani, 2005. "Immigration and Inter-Regional Mobility in the UK, 1982-2000," Economic Journal, Royal Economic Society, vol. 115(507), pages 342-358, November.
    3. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    4. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
    5. David Blanchflower & Jumana Saleheen & Chris Shadforth, 2007. "The impact of the recent migration from Eastern Europe on the UK economy," Discussion Papers 17, Monetary Policy Committee Unit, Bank of England.
    6. Blanchflower, David G. & Shadforth, Chris, 2007. "Entrepreneurship in the UK," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 3(4), pages 257-364, July.
    7. 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.
    8. Metcalf, David, 2007. "Why has the British national minimum wage had little or no impact on employment?," LSE Research Online Documents on Economics 19742, London School of Economics and Political Science, LSE Library.
    9. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April.
    10. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta‐Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, July.
    11. N/A, 2006. "The UK Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 196(1), pages 40-59, April.
    12. Barry Chiswick & Timothy J. Hatton, 2003. "International Migration and the Integration of Labor Markets," NBER Chapters, in: Globalization in Historical Perspective, pages 65-120, National Bureau of Economic Research, Inc.
    13. George J. Borjas, 2021. "Does Immigration Grease the Wheels of the Labor Market?," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 14, pages 431-484, World Scientific Publishing Co. Pte. Ltd..
    14. David G. Blanchflower & Andrew J. Oswald, 2005. "Happiness and the Human Development Index: The Paradox of Australia," NBER Working Papers 11416, National Bureau of Economic Research, Inc.
    15. Jean, Sébastien & Jiménez, Miguel, 2011. "The unemployment impact of immigration in OECD countries," European Journal of Political Economy, Elsevier, vol. 27(2), pages 241-256, June.
    16. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
    17. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-468, November.
    18. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
    19. Constant, Amelie & Zimmermann, Klaus F, 2007. "Circular Migration: Counts of Exits and Years Away from the Host Country," CEPR Discussion Papers 6438, C.E.P.R. Discussion Papers.
    20. Zaiceva, Anzelika, 2006. "Reconciling the Estimates of Potential Migration into the Enlarged European Union," IZA Discussion Papers 2519, Institute of Labor Economics (IZA).
    21. Douglas Staiger & James H. Stock & Mark W. Watson, 1997. "The NAIRU, Unemployment and Monetary Policy," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 33-49, Winter.
    22. Dustmann, Christian, 1994. "Return Intentions of Migrants: Theory and Evidence," CEPR Discussion Papers 906, C.E.P.R. Discussion Papers.
    23. David G. Blanchflower & Andrew J. Oswald, 2005. "Happiness and the Human Development Index: The Paradox of Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(3), pages 307-318, September.
    24. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute of Labor Economics (IZA).
    25. Blanchflower, David G, 1991. "Fear, Unemployment and Pay Flexibility," Economic Journal, Royal Economic Society, vol. 101(406), pages 483-496, May.
    26. Gianmarco I.P. Ottaviano & Giovanni Peri, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the U.S," NBER Working Papers 11672, National Bureau of Economic Research, Inc.
    27. Lawrence Katz & Alan Krueger, 1999. "The High-pressure U.S. Labor Market of the 1990s," Working Papers 795, Princeton University, Department of Economics, Industrial Relations Section..
    28. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
    29. Christian Dustmann & Tommaso Frattini, 2011. "Immigration: The European Experience," CReAM Discussion Paper Series 1122, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    30. Lawrence F. Katz & Alan B. Krueger, 1999. "The High-Pressure U.S. Labor Market of the 1990s," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 1-88.
    31. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, January-J.
    32. Ethan Lewis, 2005. "Immigration, Skill Mix, and the Choice of Technique," Working Papers 05-04, Center for Economic Studies, U.S. Census Bureau.
    33. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence," CReAM Discussion Paper Series 0702, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    34. Drinkwater, Stephen & Eade, John & Garapich, Michal, 2006. "Poles Apart? EU Enlargement and the Labour Market Outcomes of Immigrants in the UK," IZA Discussion Papers 2410, Institute of Labor Economics (IZA).
    35. Berndt, Ernst R & Christensen, Laurits R, 1974. "Testing for the Existence of a Consistent Aggregate Index of Labor Inputs," American Economic Review, American Economic Association, vol. 64(3), pages 391-404, June.
    36. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 236-256, June.
    37. Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
    38. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-559, November.
    39. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
    40. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
    41. David Metcalf, 2007. "Why Has the British National Minimum Wage Had Little or No Impact on Employment?," CEP Discussion Papers dp0781, Centre for Economic Performance, LSE.
    42. Christian Dustmann & Francesca Fabbri, 2005. "Immigrants in the British labour market," Fiscal Studies, Institute for Fiscal Studies, vol. 26(4), pages 423-470, December.
    43. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2005. "Job Search Methods and Their Success: A Comparison of Immigrants and Natives in the UK," Economic Journal, Royal Economic Society, vol. 115(507), pages 359-376, November.
    44. David G. Blanchflower & Richard B. Freeman, 1997. "The Attitudinal Legacy of Communist Labor Relations," ILR Review, Cornell University, ILR School, vol. 50(3), pages 438-459, April.
    45. Siegfried, Nikolaus & Schiopu, Ioana, 2006. "Determinants of workers' remittances: evidence from the European Neighbouring Region," Working Paper Series 688, European Central Bank.
    46. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence From Philippine Migrants%u2019 Responses to Exchange Rate Shocks," NBER Working Papers 12396, National Bureau of Economic Research, Inc.
    47. Christian Dustmann & Francesca Fabbri & Ian Preston, 2005. "The Impact of Immigration on the British Labour Market," Economic Journal, Royal Economic Society, vol. 115(507), pages 324-341, November.
    48. repec:fth:prinin:416 is not listed on IDEAS
    49. Ottaviano, Gianmarco & Peri, Giovanni, 2005. "Rethinking the Gains from Immigration: Theory and Evidence from the US," CEPR Discussion Papers 5226, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blanchflower, David G. & Lawton, Helen, 2008. "The Impact of the Recent Expansion of the EU on the UK Labour Market," IZA Discussion Papers 3695, Institute of Labor Economics (IZA).
    2. Lemos, Sara & Portes, Jonathan, 2008. "New Labour? The Impact of Migration from Central and Eastern European Countries on the UK Labour Market," IZA Discussion Papers 3756, Institute of Labor Economics (IZA).
    3. Bijwaard, Govert E. & Wahba, Jackline, 2014. "Do high-income or low-income immigrants leave faster?," Journal of Development Economics, Elsevier, vol. 108(C), pages 54-68.
    4. David Blanchflower, 2009. "Minority self-employment in the United States and the impact of affirmative action programs," Annals of Finance, Springer, vol. 5(3), pages 361-396, June.
    5. N. N., 2009. "Labour Mobility within the EU in the Context of Enlargement and the Functioning of the Transitional Arrangements," WIFO Studies, WIFO, number 35641, June.
    6. Nijkamp, P. & Poot, H.J., 2012. "Migration impact assessment: A state of the art," Serie Research Memoranda 0009, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    7. Aguilar, Alexandra Cortés & García Muñoz, Teresa M. & Moro-Egido, Ana I., 2013. "Heterogeneous self-employment and satisfaction in Latin America," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 44-61.
    8. Peter Huber & Gabriele Tondl, 2012. "Migration and regional convergence in the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 439-460, November.
    9. Lemos, Sara, 2017. "Mind the gap: A detailed picture of the immigrant-native earnings gap in the UK using longitudinal data between 1978 and 2006," Regional Science and Urban Economics, Elsevier, vol. 63(C), pages 57-75.
    10. Blanchflower, David G. & Saleheen, Jumana & Shadforth, Chris, 2007. "The Impact of the Recent Migration from Eastern Europe on the UK Economy," IZA Discussion Papers 2615, Institute of Labor Economics (IZA).
    11. Dustmann, Christian & Glitz, Albrecht & Vogel, Thorsten, 2010. "Employment, wages, and the economic cycle: Differences between immigrants and natives," European Economic Review, Elsevier, vol. 54(1), pages 1-17, January.
    12. ., 2012. "Migration impact assessment: a state of the art," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 1, pages 3-62, Edward Elgar Publishing.
    13. David Bell & David G. Blanchflower, 2007. "The Scots May Be Brave But They Are Neither Healthy Nor Happy," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(2), pages 166-194, May.
    14. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    15. Alvaro Morcillo & Rashmi Bhat, 2013. "Return migration to South Africa: reasons and socioeconomic profile," NCID Working Papers 03/2013, Navarra Center for International Development, University of Navarra.
    16. Gordon H. Hanson, 2009. "The Economic Consequences of the International Migration of Labor," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 179-208, May.
    17. Abarcar, Paolo, 2017. "The return motivations of legal permanent migrants: Evidence from exchange rate shocks and immigrants in Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 62-77.
    18. David G. Blanchflower, 2009. "International Evidence on Well-Being," NBER Chapters, in: Measuring the Subjective Well-Being of Nations: National Accounts of Time Use and Well-Being, pages 155-226, National Bureau of Economic Research, Inc.
    19. Bonin, Holger, 2017. "The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute of Labor Economics (IZA).
    20. Christian Dustmann & Joseph-Simon Görlach, 2016. "The Economics of Temporary Migrations," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 98-136, March.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13506. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.