Off EU Go? Brexit, the UK Labour Market and Immigration
Immigration remains a highly antagonistic issue and its purported effects in the labour market are still contestable. Against this background, the UK looks set to undertake a large overhaul of its immigration policy following the decision to leave the EU. To try to inform the debate, this study summarises the key patterns and changes in the UK labour market regarding immigration in the run-up to and the immediate aftermath of the Brexit vote. The paper then offers some ideas that could explain why immigration appears to have had little effect, either positive or negative, on the wage and employment outcomes of UK-born residents. It next outlines the current state of the labour market and the role of EU immigrants in it as the UK edges toward Brexit. The paper then considers where change may be seen most strongly following Brexit and discusses the many possible immigration policy options open to the government after the UK leaves the EU. Policy points: There is little evidence that immigration has had an effect, either positive or negative, on the employment or wages of UK-born workers; Any restrictions on EU workers are likely to be on the flow rather than the stock, and the flows are much smaller. But sectors with high turnover and low pay may well feel the pinch more than others; A range of post-Brexit options are analysed and reviewed. The difficulty, as ever, is in determining what things to try to improve / leave alone and for whose benefit/detriment. The options for future immigration policy are many and varied and there are no easy answers as to what to do or what to prioritise; While there could be opportunities to reform immigration policy following Brexit, there is not much time to put a studied scheme in place. This is an area that is particularly vulnerable to reforms that may have unintended consequences.
1 December 2018
Fiscal Studies 39(4) , pp.625-649, 2018