If there is something known about EU immigrants in the UK is that their willingness to work is higher in comparison with UK-born citizens. According to Wadsworth et al. (2016), 78.2% of EU immigrants in working age are employed, with only 3.2% being unemployed. This contrast implies that they pay more taxes than what they receive in subsidies, resulting in a positive fiscal account and allowing the government to increase its revenues, this way contributing to the payment of the current UK debt. Additionally, the authors argue that if net migration is reduced to zero, by 2062 the outstanding debt would have increased in about 40%.
Furthermore, EU immigrants are, on average, more educated than UK-born citizens. Again, Wadsworth et al. (2016) state that 44% of UK-born citizens give up on studies at age 16 or earlier, in comparison to only 15% among EU immigrants. The higher the education, the higher the specialization and productivity. Furthermore, with increased productivity, a rise in wages is expected, both for EU immigrants and UK-born citizens, due to spill-over effects. In addition, the authors defend that an increase of 10% in the number of immigrants leads to an income increase of 2.2% per capita.
Finally, empirical evidence shows that EU immigration has no statistically significant effect on UK’s unemployment, neither positive nor negative. In contrast, cutting immigration can result in a decrease in overall country’s income. With lower contributions to the UK’s government budget, UK-born taxpayers would have to pay more, in order to compensate the gap. On top of that, wages will likely fall, as a result of the decrease in productivity.
Sources:
- Wadsworth, J., Dhingra, S., Ottaviano, G., & Van Reenen, J. (2016). Brexit and the Impact of Immigration on the UK. CEP Brexit Analysis, 5: 34-53. https://cep.lse.ac.uk/pubs/download/brexit05.pdf
NEC Member
Students of the Bachelor’s Degree in Economics
Nova School of Business and Economics
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