There is little evidence that immigrants raise unemployment rates or lower wages in the
regions of Britain where they concentrate, according to new research by Professor
Christian Dustmann, Dr Francesca Fabbri and Professor Ian Preston, published in the
November 2005 issue of the Economic Journal.
Their study investigates the effects of different rates of immigration on regional
unemployment rates across the whole of Britain.
They reason that if immigrants do (as some people believe ) compete head-to-head with
existing workers, undercutting their pay and pushing them out of jobs, then unemployment
should be higher in just those places where immigrant inflows loom larger.
The researchers find that these effects are typically small; indeed, one cannot be confident
that there is any impact at all.
Why are these effects so small and imprecise? One possibility is that employment levels of
immigrants and non-immigrants are only maintained in the face of greater competition by
lower wages. But these researchers find no adverse wage effects either.
Instead, they argue, immigrants create their own jobs by expanding employment as a
whole. To the extent that immigrants bring different skills to a locality, that locality
specialises more in goods and services that are intensive in the use of those skills, selling
them in competitive markets at home and abroad.
One way of viewing the phenomenon is to say that it is the goods market that does the
adjusting to immigration rather than the labour market.
ENDS
Notes for Editors: ‘The Impact of Immigration on the UK Labour Market’ by Christian
Dustmann, Francesca Fabbri and Ian Preston is published in the November 2005 issue of
the Economic Journal.
Christian Dustmann and Ian Preston are at University College London. Francesca Fabbri is
at the University of Munich.
For further information: contact Christian Dustmann on 020-7679-5832 (email:
c.dustmann@ucl.ac.uk); or RES Media Consultant Romesh Vaitilingam on 0117-983-9770
or 07768-661095 (email: romesh@compuserve.com).