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Explaining trends in UK immigration

Abstract

Since the 1970s Britain has gone from being a country of net emigration to one of net immigration, with a trend increase in immigration of more than 100,000 per year. This paper represents the first attempt to model the variations in net migration for British and for foreign citizens, across countries and over time. A simple economic model, which includes the selection effects of differing income distributions at home and abroad, largely accounts for the variations in the data. The results suggest that although improved economic performance in the UK relative to overseas has tended to increase immigration, rising UK inequality has had an even larger effect. Immigration policies at home and abroad have also increased net immigration, particularly in the 1990s.

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Notes

  1. Studies for individual countries include Cobb-Clark and Connolly (1997) for Australia, Clark et al. (2002) for the United States, Karemera et al. (2000) for the United States and Canada and Karras and Chiswick (1999) for Germany. Other studies are summarised by Bauer and Zimmermann (1999). Recent papers by Mayda (2003) and Pedersen et al. (2004) provide estimates from panel data for a range of major immigration countries.

  2. A survey of UK immigration by Glover et al. (2001) published by the Home Office contains some assessment of the factors behind recent trends in immigration as background to the 2002 Act and the government White Paper that preceded it. However, it does not cite any quantitative studies, and it only provides evidence of a negative relationship between net immigration and UK unemployment since 1984. Hatton and Wheatley Price (2005) provide a survey of the literature on longer term trends in UK international migration and immigration policy.

  3. One exception is Mitchell and Pain (2003) which appeared after this paper was written.

  4. Adjusted figures are available only since the mid-1980s, and they are available at a disaggregated level only from 1999. For the analysis that follows there is no alternative but to use the unadjusted figures to maintain comparability over time and across different source/destination regions (see Appendix).

  5. These categories are not ideal, but they are the lowest level of aggregation available in the published statistics.

  6. Although it might be desirable to analyse them separately, the migrant flows that are used in the econometric estimates include these non-worker categories because it is not possible to disaggregate by status and by source or destination from the published figures.

  7. These are currently issued by Work Permits UK, a part of the Home Office, but for most of the period under review, they were issued by the Overseas Labour Service of the Department of Education and Employment.

  8. Current regulations can be found at http://www.ind.homeoffice.gov.uk/.

  9. On the system up to the late 1980s, see Salt and Kitching (1990); arrangements until the most recent changes are summarised in Glover et al. (2001).

  10. Summaries of immigration policies in the major receiving countries can be found in Stalker (1994), UN (1998) and OECD (1998). On international migration law, see Plender (1987).

  11. Because immigration is the left-hand side variable, the sampling errors will not bias the estimates provided that they are not correlated with the explanatory variables.

  12. The Middle East is separately distinguished but only from the 1980s, and so this is subsumed in other foreign.

  13. Income and population data were obtained from http://www.worldbank,org/research/growth/GDNdata.htm.

  14. I am grateful to Andrew Shephard who kindly made this series available to me. Further details and an analysis of trends in income equality (for 1979–1997) are given in Clark and Taylor (1999). Steve Machin kindly provided an alternative series for UK wage inequality. This series gives similar results to those using income inequality, and so only the latter are reported in the following sections.

  15. These data are available at http://www.wider.unu.edu/wiid/wiid.htm. Certain adjustments were made according to whether the observations were for income/expenditure, gross/net income or individuals/households.

  16. These data are reported in ONS International Migration, 1983.

  17. These and other effects are calculated by multiplying the coefficient by the number of country groups to obtain the effects on total immigration.

  18. One reason for using lagged variables is that there may be simultaneity between immigration and income distribution, see for example Lerman (1999) for the United States and Barrett et al. (2000) for Ireland. Although unemployment is not lagged, the evidence produced by Dustmann et al. (2003) suggests that, for the UK, immigration has almost no effect on unemployment.

  19. Borjas (1993) argued that the introduction in Canada, from the 1960s, of policies that were more skill-selective than those in the United States led to a larger share of Canadian immigrants than of American immigrants coming from more developed regions. It seems that rising income inequality in Britain has gradually been producing a similar selection effect to that produced by policy in Canada.

  20. The developed regions are taken to be Europe, the United States, Australia, Canada and New Zealand.

  21. However, the magnitudes of the effects are different. They find that an increase of 1% in UK income relative to source countries increases immigration by about 2,500, whereas an increase of 1,000 in the immigrant stock raises the inflow by about 65. Thus the income effect is much larger, and the stock effect is somewhat smaller than in the estimates of Table 5.

  22. Mitchell and Pain (2003) used as a measure of policy the (lagged) level of UK immigration relative to total immigration to France Germany, Belgium and the Netherlands. They found that the coefficient was generally positive, as expected, but not significant.

  23. This is just a linear decomposition where the estimated coefficients are applied to the differences in the data means for the 13 country groups and then multiplied by 13 to sum up to the aggregate.

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Acknowledgements

This research was undertaken while I held a British Academy Research Readership for which I am grateful. I would like to acknowledge help with the data from Tom Clark, Andrew Shephard, Steve Machin, Drew Treasure and Margi Wood. I am also grateful for useful comments on earlier versions of the paper from participants at a CEPR workshop an IZA conference, seminars at the University of Essex and the Australian National University and from three anonymous referees.

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Correspondence to Timothy J. Hatton.

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Communicated by Klaus F. Zimmermann

The International Passenger Survey

The International Passenger Survey

The International Passenger Survey (IPS) is the only comprehensive source of UK international migration statistics. It has been taken in its present form since 1964 and comprehensive tabulations have been published annually by the Office for National Statistics as International Migration since 1974. It is based on interviews with a sample of passengers arriving and departing at UK ports, airports and the channel tunnel. The results are used for a variety of purposes including estimates of tourism and of components of the balance of payments. As noted in the text, the definition used to identify a migrant is a person who is arriving or departing for an intended stay of at least a year, having previously spent at least a year overseas (for arrivals) or in the UK (for departures). The advantages of the IPS are that it measures both immigration and emigration and that it does not depend on visa status. The disadvantage is that it is based on a small sample and is therefore subject to sampling error.

Passengers arriving from and departing to overseas countries are randomly sampled in shifts between 6 a.m. and 11 p.m. To boost the number of migrants in the survey, some shifts proceed to the full interview only when the individual is identified as a migrant. The results are then grossed up to the aggregate using a complex weighting system based on factors that reflect the probability of being sampled and with an allowance for ‘out of hours’ arrivals and departures. To illustrate, in 2001 there were 256,000 interviews of which approximately 1% were identified as migrants. These are about 0.5% of the grossed-up figure for total migrant flows (International Migration 2001, p. 34–5). Sampling errors are calculated for total migration and its components. In 2001 the standard error was 4.1% for the migrant inflow and 5.2% for the migrant outflow. Not surprisingly the standard errors are far larger for sub-aggregates. For inflows, the average standard error for 15 origin regions is 17%, whereas for inflows the average standard error by destination region is 24.4% (International Migration 2001, p. 30). Thus there is a large margin of error in any particular sub-aggregate figure for a single year. Nevertheless, because, by construction, these errors are random it is still valid to use the data as a left-hand side variable in regression analysis.

Non-response to questions is generally quite small (effectively zero for categories such as citizenship and last or next residence). But there are some systematic biases. There are those who say they intend to stay for less than a year but end up staying longer (visitor switchers) and those who say they intend to stay for more than a year but leave earlier. In addition, there are asylum seekers (and others) who often enter (and leave) clandestinely and to that extent are not captured in the survey. Finally, there are migrants to and from the Republic of Ireland who are not surveyed and therefore do not appear in the IPS data. The ONS uses other sources to adjust the total inflows and outflows from the IPS to obtain total gross and net migration figures, but until very recently, those adjustments have not been carried through to the sub-aggregate data. Thus any analysis of sub-aggregate data over the longer term has to be conducted using the unadjusted IPS figures.

For 1999 onwards, certain improvements were made to the system of weighting the IPS responses, and routes to and from Ireland are now included in the survey. But more radical adjustments were made to the data for the 1990s following the 2001 census. The census produced a lower population figure in 2001 than the annual estimates constructed from births, deaths and net migration predicted. Part of this was due to the over correction of the undercount in the previous benchmark, the 1991 census (evidently a result non-response due to the poll tax). But the ONS also believes that net immigration in the 1990s was overestimated and has revised total net immigration downwards by 351,000 for the decade. Most of this revision applies to the adjustments to the IPS (visitor switchers, asylum seekers, etc.) rather than to the IPS itself. But IPS net immigration is also revised down by 12,600 per annum, largely as a result of changes to the weighting adjustments

The recent revisions suggest that IPS inflows were underestimated and outflows were overestimated during the 1990s. But those revisions have not been carried back to the 1980s and earlier, and it is far from clear why the flaws in the survey adjustments should apply only to the 1990s. Given that the survey methodology has not changed, it seems safer to use the data as reported on a consistent basis rather than including the adjustments for the 1990s.

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Hatton, T.J. Explaining trends in UK immigration. J Popul Econ 18, 719–740 (2005). https://doi.org/10.1007/s00148-005-0015-1

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Keywords

  • Immigration
  • Emigration
  • Immigration policy

JEL

  • F22
  • J61
  • J78