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Labour Migration Notes

Economics Notes > Contemporary Issues in the UK Economy Notes

This is an extract of our Labour Migration document, which we sell as part of our Contemporary Issues in the UK Economy Notes collection written by the top tier of University Of Birmingham students.

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Labour Migration Can use the EU accession of the EU8ccession of the EU8 countries (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia and Slovakia) in 2004 as a natural experiment. Can measure using the Labour Force Survey but the most common measure is the International Passenger Survey (IPS). Only surveys those trying to work or working. Has occurred since 1964 at airports and ports, sampling about

0.2% of passengers. Trends are:

* 1960-80s, emigration from the UK was almost always greater than immigration.

* 1980s-mid90s, net immigration was usually positive and small.

* Subsequently net immigration has typically been much higher. Since 2004 this can be partly explained by the EU accession though before immigration was rising and emigration was falling. Hatton (2005) - Characteristics of Immigrants, pre-2000 More likely to be female than male, increasing number of students, 15-24 age group and net immigration of skilled workers (more than double that of unskilled). Migration Observatory Oxford Uni - Characteristics of migrants in UK labour market Slightly younger than UK born workers (39% foreign born aged between 25-35) while less than 24% of UK born workers are in this group. 68% of migrants employed in 2011 compared to 72.5% of UK born. More educated. UK GOVERNMENT POLICY Governed by Immigration Act 1971 and subsequent amendments to it. Control administered by UK border agency. Essentially Irish citizens and nationals of EEA countries are free to live and work in Britain as well as Commonwealth citizens with British passports. Otherwise to work you need a work permit applied for by prospective employers - initially granted for 4 years. Can be given to short-term workers e.g. agricultural workers, holiday makers, au pairs for example. Infinite leave granted possibly for family reunification. Other main group is students. Admitted is accepted on a course at a recognised institution for the duration of the course and asylum seekers recently Libya and Syria. Net immigration in 2011 was 215,000 according to ONS. Generally free movement of labour within the EY so policy is aimed at restricting immigration from outside the EU - more skilled workers can enter more easily. Although the gov has increased restrictions even among highly-skilled workers with a limit on the number allowed to enter. Pay for visas, pass tests. WHY DO PEOPLE MIGRATE?
Hatton (2005) - choice to move countries. Person i, with skill level si living in country y but is considering moving to x. initial income y is:

w yi = a y + b y s i If she moves to x she will earn:

w x i= a x + b x s i

Higher a means a country has a generally higher level of wages. A higher b means there is a greater return to skills in the country and a more unequal distribution of income. Migration costs are composed of: 1) Individual preference for migration zi - includes preferences for climate, presence of relatives in the country etc. 2) Direct cost c - monetary cost of moving (plane tickets, visa ap etc.) common to all potential migrants. 3) Immigration policy - costs included in c. different for each country. A person will move if the expected benefits of migration exceed the expected costs. So the probability an individual will migrate is:

P r o b(w x i-w y i-z i-c >0 Migration flows will be higher if:

* Source country mean income is lower

* Destination country mean income is higher

* Migration costs are lower

* Immigration policy is less costly.

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