Immigration and its impact

on the UK Economy
Is an increase in the number of migrants as bad as many of the general
public fear?

Source: www.vectortemplates.com
Presentation Structure
• Introduction
• Three economic impacts of immigration:
• Labour Market Impact
• Economic Equality
• Net Fiscal Impact
• Conclusion
Introduction
• Increasing net migration
• Immigration becomes a public concern

Source: www.i.telegraph.co.uk
Source: www.migrationwatchuk.org (2015)

Source: www.migrationwatchuk.org (2015)

Labour Market Impact
• Two main concerns:
• Wage rate
• Employment rate
• Immigration increases the number of the UK labour force:
• Reduction in wage rate.
• Increase the unemployment rate among natives.
• Economy in the long run:
• There is no significant effect on wage rate.
• There is no fixed number of jobs:
• More population
• More demand of goods and services
• More jobs available
 Labour Supply and Demand Curve

Source: Howard Reed and Maria Latorre (2009, p.10)

Economic Equality
• Impact on income disparity between low and high skilled labour
• Immigration:
• Can affect positively or negatively.
• Depends on immigrants characteristics.
• Law of diminishing marginal product of labour:
• More high skilled labour, less valuable.
• Reduce inequality.
 Long-Term International Migration estimates of immigration to the UK, by main reason for migration
Net Fiscal Impact
• Impact on the UK government finance
• The difference between contribution that immigrants give and
welfare benefits they receive:
• Depends on characteristic of migrants:
• Migrants tend to be younger and in a working age.
• Mixed results of researches:
• The recent trend is positive.
• Immigrants promote a good contribution.

Source: Vargas-Silva (2014, p.6)

Source: www.understandglobalization.com

Source: Migration Statistics Quarterly Report, August 2015, www.ons.gov.uk

Conclusion
• Immigration impacts:
• Negligible effect on the wage rate reduction.
• Increase employment rate, new job vacancies available.
• Reduce wage disparity & promote economic equality.
• Positive contribution on net fiscal impact.
• Good way to improve the UK economic performance:
• The UK government need to create policies that
ensure this country can benefit from immigration.

Source: www.vectortemplates.com
Source: www.mnprisondoulaproject.org