The UK saw a sharp rise in work-related migration, particularly from the EU, in the 2000s and 2010s, with profound impacts on the labour market. We investigate the relationship between migration and productivity in Great Britain between 2002 and 2018, using an instrumental variable approach which follows the commonly used shift-share methodology. Our results, which are robust to a variety of tests, suggest that immigration has a positive and significant impact (in both the statistical sense and more broadly) on productivity, as measured by GVA per job at the Travel-to-Work-Area level. We indeed find that a 1 p.p. increase in the share of migrants is associated with a 0.84 % increase in productivity in 2SLS estimates. We discuss the implications for post-Brexit immigration policy.
The Impact of Migration on Productivity: Evidence from the United Kingdom
Campo F.
;
2024
Abstract
The UK saw a sharp rise in work-related migration, particularly from the EU, in the 2000s and 2010s, with profound impacts on the labour market. We investigate the relationship between migration and productivity in Great Britain between 2002 and 2018, using an instrumental variable approach which follows the commonly used shift-share methodology. Our results, which are robust to a variety of tests, suggest that immigration has a positive and significant impact (in both the statistical sense and more broadly) on productivity, as measured by GVA per job at the Travel-to-Work-Area level. We indeed find that a 1 p.p. increase in the share of migrants is associated with a 0.84 % increase in productivity in 2SLS estimates. We discuss the implications for post-Brexit immigration policy.
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