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UK – Skills migration boosts productivity and makes a net contribution to economy

05 November 2013

New research findings published by the National Institute of Economic and Social Research (NIESR) show evidence of a positive and significant association between increases in the employment of migrant workers and labour productivity.

The research, which included employer interview, focus groups, and data analysis, found that recruiting from outside the UK had allowed employers to fill skilled and specialist roles and enabled some organisations to expand. It also found the employees accept the need for skilled migration and have benefited from working alongside migrants, while expressing some concern for job opportunities for UK born workers.

The research found that while employers see skilled migration as most important in meeting their needs, this was at odds with the public’s image of a migrant worker involved in low skilled, low paid work. Public concern and knowledge about migration is largely focused on low skilled work, yet it is only part of the picture: in fact, migrant workers’ skill levels are, on average, higher than those of the native born.

Employers reported that migrants’ skills are often complementary to, rather than substitution for, those of UK born employees. A number of employers said they need people with international experience who can ‘think globally’. Focus group participants felt that the UK born now need to ‘up their game’ as labour markets become increasingly global.

Focus group participants accepted that employers sometimes need to source skilled employees from outside the UK. However, they also believed that skills shortages need addressing through measures including changes to the education and welfare systems. There is a mismatch between what employers say they do and what the public believes they do in terms of growing talent from within the UK.

Employers believe that the different experiences and perspectives of migrants create teams with different strengths and make workplaces more dynamic. The report includes a number of examples of how employers benefit from the perspectives and approaches of UK born and migrant employees. These benefits were readily acknowledged by focus group participants who felt that, at workplace level, diversity brought about through migration, was generally working well.

One of the authors of the report, Health Rolfe, said: “We hear a lot about public opinion and concern about migration, bit our findings suggest that the need for skilled migration is more widely accepted than is often believed. People enjoy working alongside migrants and feel they personally benefit in terms of their own skills and the services they are able to provide.”   

On the same day, study published by by University College London said immigrants to the UK since 2000 have made a "substantial" contribution to public finances. The report claimed that recent immigrants were less likely to claim benefits and live in social housing than people born in Britain. The authors said rather than being a "drain", their contribution to the UK economy had been "remarkably strong".

Using Labour Force survey data, the report calculated that UK immigrants from the European Economic Area (EU plus Norway, Iceland and Liechtenstein) had made a particularly positive contribution in ten years up to 2011, contributing 34% more in taxes than they received in benefits. Immigrants from outside the EEA contributed 2% more in taxes than they received in the same period, while British people paid 11% less in tax than they received.

"Given this evidence, claims about 'benefit tourism' by EEA immigrants seem to be disconnected from reality.” Said report co-author, Professor Christian Dustmann

According to the 2011 census, 13% of the population of England and Wales was born outside the UK.

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