There’s still no conclusive evidence immigration causes unemployment

jobs, migration

Author(s):  Matt Cavanagh
Published date:  11 Jan 2012
Source:  Liberal Conspiracy

The Migration Advisory Committee (MAC) yesterday published a report on the impact of immigration on unemployment. There is a danger that its finding there is an “association” between immigration and employment – in particular that “an extra 100 non-EU migrants are initially associated with 23 fewer native people employed” – will be seized on as ‘gotcha’ moment confirming the view that immigrants take jobs off British people.

But a number of cautionary points need to be made.

First, this relates only to non-EU migrants. It isn’t in any way a vindication of MigrationWatch and others who were arguing in the media yesterday about migrants from Eastern Europe: indeed, the MAC explicitly states that it finds no association between EU migrants and unemployment.

Second, it relates only to short-term migrants. For those who stay longer than five years, the MAC again finds no association between migration and employment. This is significant in relation to the Government’s proposals to severely restrict the opportunities for working migrants to stay longer than five years.

The combination of these two points means that, while the figure of ’100 migrants displace 23 British workers’ will doubtless get the attention, the MAC’s overall finding, covering EU and non-EU migrants, and those who stay over five years, is that the 2.1 million additional foreign workers in 2010 compared with 1995 are “associated with” 160,000 fewer resident workers: a ratio of 1 in 13 rather than 1 in 4.

Third, hidden in the detail of the MAC report is an important distinction between periods of economic growth and economic downturns.

The MAC has chosen to present its results for the whole period (from 1995 to 2010); but if it had chosen instead to separate the two – for example looking at the period 1995-2008, and then separately at 2008-10 – the same results would have yielded an “association” between immigration and unemployment in a downturn, but not in periods of economic growth (see Table 4.1 on p63).

Fourth the MAC is clear that it is not claiming to have found a causal link – it is merely “an association”. It also admits to some important limitations on the robustness of its results (see pp 116-117, para A67).

All of these caveats mean the report should be treated with caution, as its authors would surely agree.

This is particularly important because another report published yesterday by the National Institute for Economic and Social Research (NIESR) – which uses data from national insurance numbers, rather than the survey data – finds no link between immigration and unemployment.

As things stand, there is no conclusive evidence which shows that cutting immigration will make a significant contribution to reducing unemployment, let alone be the silver bullet which many believe it is.