Wednesday May 6, 2015 - 10:27:58 GMT
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The Polish plumber's surprising impact on the economy
Ever since the A8 countries – Poland, Lithuania, Hungary, Slovakia, the Czech Republic, Slovenia, Latvia and Estonia – joined the European Union in 2004, British commentators have expressed concern about the impact of immigration from Eastern Europe. The Polish plumber became a stock character in British comedy almost immediately, but some wondered if the truth wasn't less funny: were migrants actually having a negative impact on the British economy? It's difficult to measure the impact of a particular group on the economy, but the evidence seems to suggest that immigration from the A8 countries actually has a net positive effect on the economy. The numbers indicate that migrants from Poland and other countries in Eastern and Central Europe contribute more to public finances than they take out, as well as contributing to the economy in other ways. The numbers paint a picture of a high level of migration to Britain from the A8. The 2011 census identified 2.7 million residents of the UK who were born in other EU countries, with 1.1 million of those coming from Bulgaria, Romania or the A8 nations. Of these nations, Poland boasted the largest number of residents, with over 600,000 people born in Poland and living in the UK. The large number of residents from the A8 nations has caused some to speculate that these new arrivals constitute a drain on public finances. For instance, the Daily Mail alleged that migrants were costing taxpayers “billions of pounds a year.” However, the reverse appears to be true. A8 immigrants tend to use fewer public services than native-born Britons; this is probably because most A8 migrants are younger people who place less demand on
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health services. Although immigrants from these countries tend to work in lower-wage jobs, their employment rates are high; in fact, migrants from the A8 have a higher employment rate than either migrants from other parts of the EU or people born in the UK. The result is that the most recent study by economists from University College London suggested that migrants from the A10 countries (the A8 plus Cyprus and Malta) have paid in nearly £5 billion more to public funds than they have taken out since accession. The same can't be said of people born in the UK. For some people, those high employment rates are the cause of worry: if migrants from the A8 are finding work at such a high rate, surely it must be because they're taking jobs away from locals – and if not, they must certainly be driving wages down. Estimating the impact of migration on employment is difficult, but the evidence suggests this isn't the case. Many A8 migrants work in fields where employers report difficulty finding qualified local candidates. For example, 58% of London employers questioned in a 2013 survey conducted by the London Chamber of Commerce reported that they hired migrants from the EU because of a shortage of domestic candidates with the required skills. In fact, economists from Dartmouth College and the Bank of England have found no evidence that immigration has a negative effect on either unemployment rates or wages. It is true that A8 migrants often work in lower-paid fields; the 2014 Labour Force Survey found that fewer than 10% worked in managerial or professional fields, while over 20% worked in elementary occupations such as cleaning or agricultural labour. As a result, the average wage of A8 migrants is only around half the average wage of migrants from the “old EU.” However, these wages are consistent with the wages earned by other workers in these industries. The numbers show that many of the fears about the economic impact of migrants from Eastern Europe are unfounded; in fact, the data suggests that the net effect of migration is actually positive. Politicians and commentators have devoted a great deal of energy to voicing their concerns about the dangers of migration, but the evidence we have doesn't appear to support them; a sceptical viewer might wonder if they are in fact already aware of this fact.
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