The Effect of Immigration on the UK Labour Market and Economy

Immigration is defined as the process wherein a person or group of persons leave their original country of residence and move to another in order to work or reside. The UK economy has been one of the fastest growing economies of its period which was one of the reasons why it attracted as many immigrants as it did. Considering that a majority of the immigrants are workers, it is logical to conclude that they would have had a significant impact on the labour market. This essay attempts to prove that the influx of migrants has had a positive effect on the UK economy and labour market. References:

Barwell, R. 2007, ‘The Macroeconomic Impact of International Migration’. Bank Of England Quarterly Bulletin, 213, pp. 35-42, Academic Onefile. This article begins by addressing the question of why people migrate and provides the reasons which might motivate people to take such a drastic step. It further goes on to say that immigration would affect both aggregate demand and supply levels of the economy. The article shows the different ways migrants would affect different areas such as labour supply, job search, capital stock, technology and so on. According to the author, inflow of migrants would definitely increase the level of demand and supply in the economy. It would also boost consumption levels which would in turn increase production levels.

The article suggests that the key point to be considered is whether migration would add to the inflationary pressure in the economy. The author comes to the conclusion that immigration has helped to reduce pressure of inflation in the economy. This article was another wonderful source of information to base the essay on. It provided a different perspective of immigration into the UK economy and its impact on different spheres apart from the ones mentioned in other sources. The ideas where clearly presented and easy to understand and link to the thesis. The author presented conclusions in a manner which covered worst case scenarios. He stated that the impact of immigration may remain positive at least temporarily. He appeared to remain sceptical about the long term benefits of immigration.

Coyle, D 2005, ‘THE ECONOMIC CASE FOR IMMIGRATION’, Economic Affairs, 25, 1, pp. 53-55, Business Source Premier, EBSCOhost. This article states that due to high labour demand in the UK, there has been an increase in response by migrants seeking jobs. According to the author, the immigrants due to adding to the labour supply, have been instrumental in keeping the levels of interest low and the growth rate high. The author also claims that migrants prefer searching for jobs in places where the demand for labour is high. This article reinforces the arguments of other sources which claim that the skills shortage of the economy has been very nearly eliminated due to the international expertise brought in by immigrants.

The inflow of workers has helped avoid wage inflation which is beneficial for the companies and enterprises. The author concludes by saying that the market principles are no less relevant when it comes to flows of people instead of goods and capital. This article was useful as it provided further backing to the arguments provided by the authors of the other sources used in the essay. The language was clear and easily understandable. On the other hand, however, the article was written in very general terms and portions of it could not be used in the essay due to its irrelevancy to the essay thesis.

‘The Economic Impact of International Migration within The UK Economy’ 2006, Economic Outlook, 30, 4, pp.21-26, Business Source Premier. This article discusses the impact of migration on the UK economy. It shows that since a great percentage of immigrants are of working age, it is advantageous to the UK economy as it increases the potential output levels of the economy. It shows that the migrants have brought with them their knowledge of skilled labour and also that the decision of allowing unrestricted entry to the labour market by United Kingdom was a good decision and has affected positively several sectors such as the manufacturing, business service, hospitality & catering, agriculture and many more. It also shows which nationalities make up the highest percentage in each sector. The regional distribution and areas preferred by migrants are also highlighted.

According to this article, migration has helped in reversing population decline due to an increase in the outflow migration. The author says that although the out migration has been high, the impact has not been too negative due to the inflow of migrants from abroad. The author has gone so far as to predict that if the current level of migration continues, the role of the government would shift from abating economic depression to controlling economic growth. The article concludes by stating strongly that the UK economy has gained greatly from immigration. This article had proved extremely helpful in the writing of the essay. It states in a clear and concise manner both the pros and cons of international migration. It provides overwhelming evidence to prove that immigration has benefited the UK labour market as well as economy.

Wadsworth, J 2010, “The UK Labour Market and Immigration”, National Institute Economic Review, 213, pp. 35-42. This source reviews the effects of immigration on the UK labour market. It focuses on the immigration trends such as which country provides the majority percentage of migrants, which areas are more heavily populated with migrants, the educational level of immigrants as compared to their local UK born counterparts as well as estimating the labour market impact of immigration. The author uses mathematical formulas to show statistics regarding trends such as changes in immigrant shares and outflow rates of UK born, immigration shares and local area wages as well as the relation between occupation, immigrant status and education. The article shows that although there is a downward pressure on the wages and jobs impact in the low skilled sector, these effects are not large enough to have had a significant negative impact on the UK labour market.

Wadsworth also says that the inflow of skilled migrant labour has, to an extent, resolved the problem of scarcity of skill in the manufacturing sector. This academic source has been useful as it proves statistically that the inflow of migrants has had a positive effect on the UK labour market which is the thesis of the essay. Wadsworth shows that although there are a few negative aspects of immigration, the overall verdict is that immigrants are more of an advantage than a disadvantage to the UK economy. It also reinforces and provides a different perspective or argument for and against other sources which have been used in the essay. However, in spite of being a valuable source of information, it had proven difficult to incorporate certain ideas of the article into the essay due to the author providing too many variable situations.