House of Lords - Economic Affairs

Select Committee on Economic Affairs First Report

CHAPTER 3: IMPACTS ON THE LABOUR MARKET AND MACRO-ECONOMY

44. The Government, business organisations and many others argue that immigration creates significant economic benefits for the UK. In a major speech on immigration in December 2007, the Home Secretary, Jacqui Smith MP, spoke of the "purity of the macroeconomic case for migration".[30] Making a similar point, the Immigration Minister, Liam Byrne MP, recently said that "there are obviously enormous economic benefits of immigration … There is a big positive impact on the economy which is worth about £6 billion".[31] The £6 billion figure is based on calculations by the Treasury, which also suggest, as the Government frequently points out, that immigration contributed about 15-20% to output growth during the period 2001-2006 (Home Office, p 319).

45. The CBI and Business for New Europe (BNE) endorsed the Government's highly positive assessment, emphasizing that immigration has been of "great economic benefit" to the economy (p 97, p 417). The Institute for Public Policy Research (IPPR) suggested that increased diversity brings "huge economic benefits" (Q 492). The assessment of the Trades Union Congress (TUC) was also positive though more cautious: "Overall, immigration has been good for this country. We have more jobs, higher wages, better services and lower taxes than we would have had without immigration … it is important not to overstate these benefits … but it is not negligible either" (p 124).

46. Given its widespread support and centrality in the Government's case for immigration, it is important to scrutinize the economic logic and available evidence underlying the claim that immigration creates significant economic benefits for the UK. This must begin with clarity about whose impacts the analysis should focus on and about what yardstick to use to measure the economic effects of immigration. Broadly speaking, international migration has economic and other consequences for three groups of people: residents in the migrant-receiving country, residents in the migrant-sending country, and migrants themselves.

47. The biggest beneficiaries from international migration are migrants themselves, as employment in higher-income countries enables them to earn higher wages and incomes than in their home countries. Immigrants' families and, in some cases, the economies of their countries of origin may also benefit. However, the economic impacts of emigration remain disputed, largely because the negative effects of the brain drain need to be balanced against the potentially beneficial effects of remittances.[32]

48. Immigration creates significant benefits for immigrants and their families, and, in some cases, also for immigrants' countries of origin. Although these effects may be given some consideration in the design of UK immigration policies, an objective analysis of the economic impacts of immigration on the UK should focus on the impacts on the resident (or "pre-existing") population in the UK. This includes British citizens and non-British long term-residents but excludes new immigrants and their countries of origin.

49. GDP—which measures the total output created by immigrants and pre-existing residents in the UK—is an irrelevant and misleading measure for the economic impacts of immigration on the resident population. The total size of an economy is not an indicator of prosperity or of residents' living standards.

50. GDP per capita is a better measure than GDP because it takes account of the fact that immigration increases not only GDP but also population. However, even GDP per capita is an imperfect criterion for measuring the economic impacts of immigration on the resident population because it includes the per capita income of immigrants, which may raise or lower GDP per capita through a compositional effect. A new immigrant with a higher average income than the average resident worker could raise GDP per capita without necessarily changing the average income of the resident population.

51. Rather than referring to total GDP when discussing the economic impacts of immigration, the Government should focus on the per capita income (as a measure of the standard of living) of the resident population.

52. The remainder of this section analyses the economic theory and empirical evidence available to assess the economic impacts of immigration on the resident population in the UK.

Impacts of immigration on the resident population in theory

53. Professor Barry Chiswick of the University of Illinois stressed that the economic impacts of immigration critically depend on the characteristics of the immigrants and of the economy of the migrant-receiving country (p 424). Professor Christian Dustmann of University College London noted that the impacts of immigration can vary with and depend on: the skills mix of migrants and the native population; the capital structure of the receiving economy; and whether and how quickly the economy adjusts to immigration through, for example a change in capital, technology, and/or the output mix (QQ 159-161). Most economic analyses of immigration thus distinguish between the impacts of low-skilled and high-skilled immigration, and between short-run and long-run effects.

54. In the short run, it is typically assumed that capital and technology are fixed or at least not fully adjustable, so that the primary effect of immigration is to increase the supply of workers in the economy. In a simple short-run model of the labour market, immigration lowers the wages of local workers who are "substitutes" and compete with immigrants for jobs, and increases the wages of locals whose skills complement those of immigrants. In the short run, immigration also increases the profit of capital owners and employers who benefit from the increased supply of labour.

55. Importantly, immigration creates a positive income effect for the resident population in aggregate only if immigrants are, on average, "different" from existing residents in terms of their skills and human/physical capital. Moreover, immigration increases the total income of the resident population only if the relative earnings of some residents, that is, those with similar skills and competing with immigrants, decline.[33]

56. In the long run, it is assumed that capital and technology may partially or fully adjust to immigration. For example, because immigration increases the returns to capital in the short run, investment is likely to increase in the long run, thereby driving down profit margins. More investment in, for example, machines and equipment, increases the demand for labour to operate the equipment, thus raising wages back towards their pre-immigration rates. Whether and how quickly these adjustments take place is an empirical question. If the economy does adjust significantly or fully, immigration will have little or no impact on the income of the resident population in the long run. If full international capital mobility is assumed, immigration will impact on productivity and incomes only if the skill mix of immigrants remains different from that of resident workers. The more similar immigrants become to resident workers in terms of their skills and employment, the smaller will be their impacts on the incomes of resident workers.

57. Professor Stephen Nickell pointed out that monetary policy plays an important role in responding to any short-term impacts of immigration on wages and/or unemployment. He gave the example of a scenario where there is an inflow of immigrant workers, "initially unemployment goes up, downward pressures on wages, downward pressure on inflation, monetary policy is loosened, some expansion in the economy absorbs the extra workers and at the end the thing [the economy] looks much the same as it did at the beginning except there are more people" (Q 37).

58. Most economists giving evidence to us suggested that the likely long-term effect of immigration is to expand employment and the economy, with small or no impacts on the per capita income of the resident population. This conclusion, and the economic model underlying it, have, however, been criticised because they exclude the possibility of dynamic effects and spill-over effects that may arise from, for example, having a bigger economy (that is, a higher GDP), a more diverse society, a greater share of highly skilled and motivated people, a higher population density and more congested living spaces. In theory, such dynamic and/or spillover effects could be positive or negative, that is, they could raise or lower the productivity of the resident population, even in the long run. Economists are divided about the likely existence and direction of the net impacts arising from such effects.

59. Professor Rowthorn argued that a greater population density, urban sprawl and congestion could reduce the productivity of the resident population (p 4).

60. Others, including the Government, insist that there are good reasons to expect significant positive dynamic and spillover effects from immigration. For example, John Elliott, Chief Economist at the Home Office, suggested that: "... in the longer run we will expect more dynamic effects to come into play. We can think of migrants contributing to the productivity of native workers directly though spillover effects. One might imagine a migrant surgeon standing next to a domestic surgeon and them learning from each other" (Q 511).

61. Making a similar point, Jonathan Portes, Chief Economist at the Department of Work and Pensions (DWP), said: "The second effect [of immigration] ... is analogous with the new trade theory which is based on the observation that there are dynamic effects from trade which go beyond those that simply come from the static model of things being either substitutes or complements." Mr Portes added: "I think we would expect from that theoretical perspective there to be dynamic effects in terms of increased competition, possibly cluster effects" (Q 517).

Empirical evidence for the UK

GDP PER CAPITA

62. There has been no empirical research that has analysed the impact of immigration on the per capita income of the resident population in the UK. A few studies have analysed the impact on GDP and GDP per capita. The Home Office submission presents data on the impacts on GDP (+£6 billion in 2006) but does not give any estimates of the impact on GDP per capita. It states that "there is no quantitative evidence available on the impact of immigration on GDP per head" (p 318). It is unclear why the Government has not commissioned research into this issue, especially since the Immigration Minister, Liam Byrne MP, told us, "I personally do think that GDP per capita is the key thing to focus on" (Q 513).[34]

63. The National Institute of Economic and Social Research (NIESR) estimated that immigration during the period 1998-2005 contributed to a rise in real GDP of about 3%. However, the research by the NIESR also suggests that immigrants during that period made up 3.8% of the population, which suggests that immigration had a slightly negative impact on GDP per capita. However, this GDP estimate captures the effects of an increase in the supply of labour only. It does not take account of the further increase in GDP that would result from an increase in capital. If capital is factored in, this could lead to GDP estimates showing a slightly positive impact on GDP per head.[35]

64. Using their model of the economy, the NIESR also analysed the impact of projected future A8 immigration. Taking 2005 as the baseline, A8 immigration was found to have a negative impact on GDP per capita in the short run (over the first four years) and a positive but small impact on GDP per capita in the longer run (0.3% higher by 2015). According to the NIESR, the negative effect in the short term is due to a short-term increase in unemployment and the slow adjustment in the capital stock in response to immigration. The long-term positive effect reflects the relatively high proportion of immigrants that are of working age and the increase in the capital stock (p 149).

65. According to the ITEM Club, the impact of the most recent wave of immigration on GDP per capita has been neutral or even slightly negative.[36] The Scottish Executive said that the impact of immigration on GDP per head is "generally minimal" (p 504).

66. The overall conclusion from existing evidence is that immigration has very small impacts on GDP per capita, whether these impacts are positive or negative. This conclusion is in line with findings of studies of the economic impacts of immigration in other countries including the US.[37] The Government should initiate research in this area, in view of the paucity of evidence for the UK.

67. Some of our witnesses argued that that the existing estimates of the impacts of immigration on GDP per capita ignore dynamic and spillover effects of immigration and therefore do not measure the "true contribution" of migrants to the UK economy. Most of the examples witnesses gave involved highly skilled migrants and related to finance, the medical sector and higher education. Such individual cases make a point about gross immigration but throw little light on the desirability of positive net immigration. Such individual cases make a point about gross immigration but throw little light on the desirability of positive net immigration.

68. According to Mr Portes of the DWP, "the City of London is an obvious example of where you might have clustering effects that will generate gains which are quite difficult to quantify in short-term economic studies" (Q 517). Making a similar point, Dr Danny Sriskandarajah of the IPPR argued "the fact that that sector [finance], which is so critical to the UK's competitiveness, can attract a diverse workforce, which comes with international networks and with knowledge of working across the world, I think, is critical to the success of that sector and, therefore, has positive spin-offs for the rest of the economy and host population" (Q 492) Dr Sriskandarajah also suggested, however, that "it is very difficult to quantify diversity" (Q 492). John Martin of the OECD said that there is very little work in this area (Q 473).

69. Although possible in theory, we found no systematic empirical evidence to suggest that net immigration creates significant dynamic benefits for the resident population in the UK. This does not necessarily mean that such effects do not exist but that there is currently no systematic evidence for them and it is possible that there are also negative dynamic and wider welfare effects.

WAGES

70. As Professor Rowthorn stated, there are three methodological difficulties in undertaking analysis of the labour market impacts of immigration (p 7). First, since immigrants tend to go to areas that are experiencing strong economic growth and labour demand, rising growth in wages and employment may cause immigration as well as being affected by it. Second, immigration from abroad into a certain area may cause some residents to move from that area to another part of the country or abroad. If this happens, the labour market impact of immigration into a certain area may be dissipated across the country, which makes it harder to measure through local labour market analysis. Third, the available migration data are often based on small samples of the population and may thus be subject to significant measurement error. Most analysis of the labour market impacts of immigration in the UK and elsewhere have used various econometric techniques to address some of these issues but some difficulties and caveats typically remain.

71. In the UK, the most recent study by Professor Dustmann and others concludes that immigration has a positive absolute wage effect for natives, but lowers wages of those workers employed in the lowest paid jobs.[38] This work suggests that every 1% increase in the ratio of immigrants to natives in the working age population ratio led to a 0.5% decrease in wages at the 1^st decile (the lowest 10% of wage earners), a 0.6% increase in wages at the median, and a 0.4% increase in wages at the 9^th decile. These effects are fairly modest. Explaining these results, Professor Dustmann and Professor Ian Preston told us that, as theory suggests, "immigrants appear to be most concentrated at precisely the same points where we find the most negative wage effects" (Q 159). Professor Dustmann expressed confidence in the robustness of his conclusions which cover the period 1997-2005, but added that future immigration may have different effects (Q 166).

72. Most of our witnesses agreed that there is some negative effect of immigration on the wages of low-skilled workers. However, there were disagreements over the extent of the effects and the amount of evidence. Professor Blanchflower said there was "some evidence" to suggest that A8 workers have lowered wage increases amongst the least skilled "but the effects are not enormous" (Q 318). The Institute of Directors argued that the effect on wage growth has "probably been limited".[39] The City of London Corporation was the most pessimistic about the impact on the low-paid. It concluded that the concentration of immigrants in low-paid jobs in the capital had led to "significant downward pressure on wages at the bottom end of the market". While this had encouraged growth in the number of these jobs, earnings among workers in this sector ended up "falling behind growth in the cost of living" (p 427). Professor Nickell suggested that home care staff and cleaners were among those whose pay was adversely affected by immigration (Q 37).

73. Even if immigrants are not competing directly for the same jobs in many cases, they may still have a strong indirect effect in depressing wages for resident workers. Professor Blanchflower found that wage growth slowed in both the UK and Ireland following A8 accession although both economies were booming. He attributed this to a rise in the fear of unemployment caused by high immigration, which in turn leads to lower wage settlements (p 196).

74. A number of witnesses pointed out that a significant proportion of the low-paid workers whose wages have been adversely affected by immigration are previous immigrants and existing ethnic minority groups (Rowthorn p 8, 24; ESRC p 448). This is because recent immigrants frequently enter sectors which already employ a large number of earlier immigrants, many of whom have since become British citizens. Slough Council said that some of the Pakistani community in the borough felt their jobs were being lost to the new incoming Polish community, which is higher skilled and prepared to work for lower wages (p 276).

75. Professor William Brown, a former member of the Low Pay Commission, argued that the national minimum wage (NMW) has played an important role in shielding low-paid workers in the UK from more adverse impacts of immigration. "It is probable that, in the absence of the NMW, wages at the lower end of the income distribution, which were already deteriorating relative to the median during the 1990s, would have subsequently experienced additional deterioration as a result of immigration" (Brown p 413). Although there is a "general belief that the NMW is enforced" (Brown p 413), the Low Pay Commission recently recommended that the Government take action to prioritise targeted enforcement of the minimum wage in those sectors that employ significant numbers of immigrant workers.[40]

76. Research by Dr Steve French on immigrant workers in Staffordshire found that some employers and agencies imposed various charges on immigrants' salaries, thus reducing their pay below the minimum wage; Dr French gave an example of a worker who had his salary cut to £3.50 an hour (p 460) This work showed that immigrant workers had little knowledge of their rights. Separate research commissioned by the Low Pay Commission found some evidence of immigrants receiving less than the minimum wage, partly because employers were housing them and deducting more than the legally allowed accommodation offset from workers' salaries.[41]

77. Although the Government has said that it would step up enforcement against employers, it is unclear how effective the new measures will be. Between 2002 and 2006, in England and Wales, only 45 employers were proceeded against for illegally employing immigrants of whom 27 were found guilty.[42]

78. The available evidence suggests that immigration has had a small negative impact on the lowest-paid workers in the UK, and a small positive impact on the earnings of higher-paid workers. Resident workers whose wages have been adversely affected by immigration are likely to include a significant proportion of previous immigrants and workers from ethnic minority groups.

79. Effective means must be found for enforcing the law against employers who illegally employ immigrants or who employ immigrants at wages and employment conditions that do not meet minimum standards.

UNEMPLOYMENT

80. The Government's preferred finding on the employment effects of immigration is that from a DWP study.[43] This analysed the impact of labour immigration of A8 workers, measured by the number of workers registered in the Worker Registration Scheme, on the claimant count rate of citizens, that is, on the proportion of the working age population in receipt of Jobseeker's Allowance. Using data up to November 2005, the study found "no discernible statistical evidence which supports the view that the inflow of A8 migrants is contributing to a rise in claimant unemployment in the UK" (p 122).

81. In an earlier study, Professor Dustmann argued that "if there is an impact of immigration on unemployment then it is statistically poorly determined and probably small in size". [44]

82. Dr Rebecca Riley of the NIESR questioned whether such a strong conclusion could be drawn from the DWP study as it did not take account of the possibility of emigration of resident workers to another part of the UK or overseas in response to immigration from abroad (Q 261). Analysis by the NIESR based on simulation models suggests that immigration increases unemployment in the short term, with close to zero effects in the long term (p 149, 151).

83. Professor Rowthorn also disagreed with the clear conclusion the Government has drawn from the DWP study and the previous study by Professor Dustmann. He pointed out that both studies did find relatively large but statistically insignificant effects of immigration on unemployment. He argued that finding effects that are statistically insignificant "does not mean that they are 'small', as the authors claim. It simply means that there is too much noise in the system to estimate them accurately" (p 8). Professor Richard Pearson also warned that studies such as that by the DWP have "severe methodological limitations" (p 485).

84. The recent ITEM Club report points to the potential negative impact of immigration on youth unemployment. The report notes that youth unemployment increased by about 100,000 since early 2004 and the participation rate has dropped from 69.4% to 67.4%. "Given the age and skill profile of many of the new immigrants, it is possible that 'native' youngsters may have been losing out in the battle for entry-level jobs".[45] The Royal Society of Edinburgh also noted that a high proportion of A8 migrants were under 24 years old and said that further research was needed on the impact on the youth labour market (p 503).

85. The available evidence is insufficient to draw clear conclusions about the impact of immigration on unemployment in the UK. It is possible, although not yet proven, that immigration adversely affects the employment opportunities of young people who are competing with young immigrants from the A8 countries. More research is needed to examine the impact of recent immigration on unemployment among different groups of resident workers in the UK.

TRAINING AND APPRENTICESHIP

86. Liam Byrne MP told us that there was a danger of immigration discouraging British employers from investing in training of local workers, particularly at "the low end" of the labour market. He said: "That is one of the reasons why I have said that when the points system is introduced ... I do not see a need for low skilled migration from outside Europe" (Q 521). Mr Portes of the DWP added: "There clearly is a risk here that too much migration in some of the wrong sectors would indeed reduce the incentives [for training]." Mr Portes said that the Migration Advisory Committee will take this risk into account when "advising on which sectors migrants might help to fill in terms of labour market shortages" (Q 521).

87. Brendan Barber of the TUC warned that large infrastructure projects such as the London Olympics "could be entirely undertaken by migrant labour, if one simply left the key contractors to make these [recruitment] decisions for themselves. If that were to be the case, rather than there to be a positive investment in the skills and training of others in the communities of East London ... if it passed the East London economy by, that would be a disaster" (Q 194).

88. Jack Dromey of Unite said that "this is also a tremendous opportunity for Government to use the power of public procurement to target those young white kids out of work in Barking and those young second generation Bangladeshi kids in Tower Hamlets with a view to offering them apprenticeships, such that a legacy of 2012 becomes a project of which we are all proud ... [with] a new generation of Barking and Bangladeshi bricklayers" (Q 194).

89. UCATT, the largest specialist union representing construction workers in the UK and Republic of Ireland, emphasised "the continued necessity of migrant workers for the construction sector", but also argued that "more apprenticeship places must be offered to young people in the construction industry" (p 509). It pointed out that in 2006 there were 50,000 applications for construction apprenticeships but only 9,000 places available. (UCATT p 509). Stephen Ratcliffe of the Construction Confederation said that immigration did not affect employers' incentives to provide apprenticeship to young British people (Q 137).

90. Employer organisations such as the CBI and the Recruitment and Employment Confederation noted that training is at an all-time high in the UK. They advocated a "twin-track" approach which involves encouraging immigration to fill shortages in the short term while at the same time investing in domestic skill development to help fill shortages in the long term (CBI p 123).

91. The empirical evidence on the impact of immigration on the provision of apprenticeships to young British workers is limited. Professor Linda Clarke, of the University of Westminster, studied the recruitment practices of employers at Terminal 5, one of Europe's largest construction projects. According to LFS data, only 2.8% of those employed in the construction industry are from ethnic minority groups although they constitute 7% of the economically active population. Professor Clarke identified employers' reliance on recruitment agencies, "which tend to target a traditional white male and migrant workforce rather than local and diverse labour", as one of the key obstacles to a more inclusive and local labour force at Terminal 5 (p 432). She also noted that "the recruitment of migrant workers—available quickly and possessing the necessary skills and experience—appears to many stakeholders as justifiable. It was claimed too that if training is provided by a company, there is the danger of 'poaching' by competitors, and therefore skilled migrants are preferred [by employers] to taking on apprentices" (p 430).

92. A number of witnesses suggested that there is a potential adverse impact of immigration on training opportunities for British workers in other sectors besides construction. For example, Professor Pearson suggested that, in the NHS, "the employment of overseas nationals in training roles limited the career development of junior UK doctors, potentially reducing the long attractiveness of a medical career to UK nationals" (p 485). Dr Edwin Borman of the British Medical Association explained how immigration of migrant doctors and the increased number of UK-born doctors has led to an oversupply of doctors seeking postgraduate training posts in Britain. He suggested that this was partly due to an "utter failure of an effective medical planning structure" (Q 302).

93. Our recent report on apprenticeship and skills argued that the Government was not doing enough to develop high quality apprenticeships.[46] Although the evidence is limited, there is a clear danger that immigration has some adverse impact on training opportunities and apprenticeships offered to British workers. The Government acknowledged this danger in its evidence to us (Q 521). If immigration has adverse impacts on training, apprenticeships and domestic skill development, the twin track approach advocated by many employers—immigration to fill shortages in the short run, and skill development of British workers to fill shortages in the long run—will not work. The Government should consider further measures to ensure that employers recruiting immigrants are also investing in training and skills development of British workers.

MACRO-IMPACTS: INFLATION AND UNEMPLOYMENT

94. Professor Nickell suggested that immigration may reduce the equilibrium rate of unemployment. "This will happen if, for example, immigrant workers are more flexible and reduce the extent of skill mismatch, are more elastic suppliers of labour with higher levels of motivation and reliability ... This effect may, however, decrease over very long periods of time as migrants become more like the native population" He went on to say that "there is certainly a broad acceptance in the UK ... that immigration has had a tendency to reduce inflationary pressure" but cautions that "rigorous empirical analysis in this area is in short supply".[47]

95. Professor Blanchflower argued that the recent inflow of workers from Eastern Europe has lowered the natural rate of unemployment. He suggested that immigration also seems to have reduced inflationary pressures by increasing potential supply more than demand for several reasons: because locals may have cut consumption because of greater fear of unemployment; because remittances by migrant workers mean that less of their earnings is spent in the UK; and because firms may substitute some labour for capital which would curb the rise of investment. The NIESR economic model suggested that A8 immigration lowered inflation slightly in the short and medium term. The model then shows inflation almost returning to its base level over a period of 10 years. (p 151).

96. Richard Barwell of the Bank of England has cited the importance of immigrants' length of stay in determining the impact on inflation. "If the majority of immigrants do intend to return home in the near future, it is likely that they will try to save a large fraction of their income. So recent inflows may have had only a muted impact on aggregate demand." On balance, immigrants have probably had a larger impact on aggregate supply than demand, "so migration has probably helped to ease inflationary pressures in the economy, at least temporarily."[48] This is particularly true of EU immigration because so much of it is temporary. It is less true of immigration from outside the EU.

97. In the short term, immigration creates winners and losers in economic terms. The biggest winners include immigrants and their employers in the UK. Consumers may also benefit from immigration through lower prices. The losers are likely to include those employed in low-paid jobs and directly competing with new immigrant workers. This group includes some ethnic minorities and a significant share of immigrants already working in the UK.

98. In the short term, immigration may put pressure on the employment opportunities of young people. In the long run, the economic impacts of immigration on the resident population are likely to be fairly small. Thus a key question is how quickly the economy adjusts to immigration. Much more empirical work might usefully be done on the labour market and macroeconomic impacts of immigration in the UK.

30 Shared protections, shared values: next steps on migration, speech by the Home Secretary, Jacqui Smith MP, at the London School of Economics and Political Science on 5 December 2007. Back

31 Home Affairs Select Committee hearing with Liam Byrne and Lin Homer on November 27, 2007 available at: http://www.publications.parliament.uk/pa/cm200708/cmselect/cmhaff/123/7112701.htm Back

32 A recent report by the International Development Select Committee of the House of Common focused on migration and development, see: http://www.publications.parliament.uk/pa/cm200304/cmselect/cmintdev/79/79.pdf Back

33 For more on the theory of the short-run impacts, see Borjas, G. (1995), "The Economic Benefits from Immigration", Journal of Economic Perspectives 9(2): 322. Back

34 The Home Office did subsequently produce a calculation which claimed an estimated 0.15% annual gain in GDP per capita for the resident working population (Q 512-513, p358). However, the methodology behind this calculation, especially the assumption that the impact of immigration on the returns to capital is similar to the impact on the returns to labour, is questionable. Back

35 It should be noted even this slightly positive impact on GDP per capita may not be present at the GNP per capita level once the impact of investment income returns to overseas capital is taken into account. (NIESR Q 239-242). Back

36 Ernst Ernst & Young ITEM Club Special Report: Migration and the UK economy, December 2007. Available at: http://www.ey.com/global/assets.nsf/UK/ITEM_Club_Special_Report_-_Migration_and_the_UK_economy/$file/EY_ITEM_Migration_Report_Dec_2007.pdf Back

37 See Smith, J. and B. Edmonston, ed. (1997) The New Americans, Economic, Demographic and Fiscal Impacts of Immigration, National Academy Press, Washington D.C. Back

38 Dustmann et al, A Study of Migrant Workers and the National Minimum Wage and Enforcement Issues that Arise, Low Pay Commission (2007) Back

39 Institute of Directors, Immigration: a business perspective, (January 2007), p 15 Back

40 Low Pay Commission Report 2006, National Minimum Wage Back

41 Steve French and Jutta Möhrke, The impact of 'new arrivals' upon the North Staffordshire labour market, Low Pay Commission, November 2006 Back