To What Extent Does Immigration Lead to Displacement
Effects and Subdued Growth in Earnings
for UK Workers?
International Atlantic Economic Society 2018
The paper explores how immigration has impacted employment and wages for UK
natives between 2000 and 2016, using sub-periods to account for the EU enlargement
in 2004 and the 2008 recession. The Long-Term International Migration (LTIM) series,
which provides estimates of immigration, emigration and net migration flows, indicates
that between 2000 and 2016 the UK experienced a significant increase in net migration,
peaking in 2004, a 45% increase from 2003 to 2004, up 22% in terms of immigration.
The rising trend in immigration and net migration has stimulated interest from
economists and policy makers. One explanation for this is the potential adverse effects
that immigration may have on wages and employment (Lucchino et al., 2012).
The paper contributes to the literature surrounding immigration and its impact on the
labour market by examining the following research questions: Does immigration lead
to displacement of native workers; particularly for the lowest skill distribution group?
Does immigration lead to subdued growth in native wages; particularly for the lowest
skill distribution group? Can immigration be solely responsible for the subdued growth
in wages at the lowest skill distribution group?
A mixed method approach was carried out, predominantly utilising datasets from
the Office for National Statistics (ONS), including: the LTIM series, the Labor
Force Survey (LFS), Census 2011 and Annual Survey of Hours and Earnings
(ASHE). UK employment levels were analysed in search of answering part (i) of
the research questions. Following this, a skill-cell approach was utilised to divide
the labour market according to skill and explore the differing effects of migration.
Atl Econ J
* Jessica Green
Nottingham Trent University, Nottingham, UK