When economists collide..

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BY DON FLYNN
Yes, you wait for ages for a definite analysis of the impact of migration on the economy, and like the 73 bus,a whole gaggle come along at once. How do we make sense of the apparently contradictory conclusions which have emerged from the NIESR and MAC reports?
BY DON FLYNN

MRN has been upfront in arguing that a clampdown on immigration is something we don’t need at a time when economies are struggling to escape from austerity. The viewpoint of anti-immigrant groups is exactly the opposite: at a time of pressing hardship we need to stop newcomers entering the country so we can preserve the jobs and services that remain for those already here.

So yesterday’s whirlwind of apparently contradictory economic reports arguing, respectively, that immigration has little or no effect on employment levels amongst indigenous population, and that the entry of every 100 non-EU migrants into the labour displaces 23 people from jobs they hold, has caused a fair bit of head-scratching. Has economics got nothing to tell us about immigration in the UK today?

Some of the wilder speculations about the meaning of the data can happily be dismissed as silly stuff. Migration Watch UK entered the debate first with its contention that common-sense requires us to presume a relationship between rising youth unemployment and high inward migration between 2004-11. IPPR’s Matt Cavanagh dealt with the fallacies in this bit of reasoning in his blog on the Staggers website.

What remains of importance are the more substantial studies which have come from the NIESR and the MAC. On the face of it, the two contradict each other directly on the point of whether there is at least an ‘association’ (as opposed to a causal link) between inward migration and rising unemployment.

MAC Report
Let’s start with the MAC report which seems to suggest there is an association between rising unemployment and migration to the UK. Anti-immigrant currents, from the tabloids through to the on-line activists grouped around sites like ConservativeHome, were immediately relieved that the report appears to go some way to rescuing them from their ill-considered support for the dodgy reasoning of the MigrationWatch report published earlier this week.

But the succour available is less great than they might have hoped for. The Financial Times today quoted the chair of the MAC, David Metcalf as saying that his report suggests that “there is some displacement but it isn’t huge, [and] it doesn’t happen in buoyant economic times.”

Further, the report indicates that any evidence of competition is confined to skilled sectors where the admission of migrants is governed by the rules of the Points Based Scheme. This seems to draw the fangs of the argument that non-EU migration has contributed to recent rises in youth unemployment in particular, since most of those being squeezed out of the current jobs market recently are unlikely to be competing for the sort of skilled work undertaken by non-EU migrants.

NIESR Report
Onto the NIESR Report which gives a more complete consideration of the link between inward migration and unemployment. In direct opposition to the MAC report it concludes that there is no causal link between rising unemployment in the UK and rising immigration. So why the difference?

In a blog following the publication of the report, the director of the National Institute of Economic and Social Research (NIESR) Jonathan Portes, explains that the differences between the MAC and NIESR reports are largely accounted for by the datasets which their respective researchers drew on. The MAC made use of Labour Force Survey (LFS) material, which extends across all 11 regions of the UK and includes those where the presence of migrants is very small.

On the other hand the NIESR report for the first time uses data from National Insurance Number (NINO) registrations, which provides more detailed information on people moving to the UK to work. This allowed researchers at NIESR to look not just at regions but smaller local authority areas, giving the analysis greater focus and accuracy. As a consequence of this innovation, the errors in NiNo data studies are only one tenth the size of those in LFS studies employed by the MAC.

For those of you who enjoy reading about statistics you can find more information about the differences on Jonathan’s blog which I won’t reproduce here. But what is worth endorsing is his concluding remark, that the two reports and the economic theory behind them do not represent the last word in the debate. Indeed if there is a final resolution to the disputes which engage public opinion, it will require major contributions from other disciplines and other ways of thinking about migration and what it means for our societies.

MRN’s view is that gaining a proper perspective on what migration means for the world of work and the distribution of wealth in our society is of vital importance to policy discussions and debates and it is essential that we all engage with the issues. But of equal importance are the values we want to see represented, strengthened and extended in the systems, which manage and regulate the movement of people across national frontiers. On our part these should focus on attainment of equality and social justice across the entire realm of our global society.

source (MRN)

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