Highly Skilled Migration to the UK 2007-2013

3rd July 2014

Policy Changes, Financial Crises and a Possible 'Balloon Effect'

List of key definitions used in this report

Executive summary

The idea that the UK’s migration system should be focused on attracting 'the brightest and best' migrants is not new. For several years UK government policy has emphasised the need to prioritise skilled over unskilled migration. However, there is little information about how highly skilled migration to the UK has changed in recent years, amidst key migration policy changes (e.g. introduction of the Points Based System, policies to decrease net migration) and relevant economic events (e.g. 2008-2009 downturn, Eurozone crisis). This report uses the UK Labour Force Survey, which provides rich information on the skill levels of workers in the UK, to provide insights on how highly skilled migration to the UK has changed during the 2007-2013 period. To this end, the analysis focuses on recent migrant workers (RMW) who are highly skilled, rather than the entire population, or 'stock', of migrant workers in the UK.

RMW are defined as individuals born outside the UK who are not UK nationals, have been in the UK for less than three years and are in employment. The focus of the report is the subset of RMW who are also 'highly skilled' - defined in terms of level of education and/or type of occupation. The year 2007 is used as the starting point in order to start the analysis before the late 2000s economic downturn. As a general rule, the lowest numbers of highly skilled RMW across most groups in this report were registered during 2010 and as a result much of the data is broken down into two sections 2007-2010 and 2011-2013 to allow the two periods to be scrutinised more clearly.

The analysis shows that the number of highly skilled RMW decreased between 2007 and 2013, whether 'skills' refer to higher education or to employment in top occupational categories. This does not indicate a reduction in the total number of highly skilled migrants working in the UK, but just a decline in those who arrived recently to the UK (i.e. a measure which reflects the recent inflow of highly skilled migrants). The decline was concentrated among non-EEA and A8 RMW; in fact, the number of highly skilled RMW who were 'Old EU' nationals actually increased during this time period.

Despite the decline in numbers of highly skilled RMW, there was an increase over the same time period in the proportion of RMW who are highly skilled. This reflects even greater reductions in the number of non-highly skilled RMW. The greater share of RMW comprised of the highly skilled was seen for non-EEA nationals and for A8 nationals, but not for nationals of Old EU countries, where the highly educated comprised about the same share of RMW in 2013 as in 2007.

The report also identifies what might be a crucial trade-off in migration policymaking: the 'balloon effect', in which restrictions on one type or source of immigration lead to an increase in immigration through another path. In this case, the balloon effect occurs if restricting admissions of highly skilled non-EEA nationals leads to an increase in the number of highly skilled EEA nationals working in Britain. This report does not prove that the balloon effect occurs, but it shows that this is a possibility worthy of further investigation and consideration by policymakers.

The data show a pattern consistent with a partial balloon effect. It is clear that 1) the number of highly skilled EEA RMW did increase while the number of highly skilled non-EEA RMW decreased, but 2) the increase in the number of highly skilled EEA RMW was not enough to completely cancel the drop in highly skilled non-EEA RMW. But, the report does not definite evidence to demonstrate whether the balloon effect or other causes are responsible for this pattern. During the period of consideration, there were multiple relevant events affecting highly skilled migration to the UK and our analysis does not distinguish the impacts of particular events or policy changes.

Alternative stories may account for this pattern in the data. The balloon effect would suggest that restrictions on non-EEA migration change the recruitment or hiring practices of UK employers and/or the potential for EEA nationals to come to the UK and find jobs here. Employers could increase recruitment and hiring from within the EEA, while EEA nationals could increasingly seek and/or find work in Britain. On the other hand, it could be that EEA migration and the likelihood of EEA migrants finding jobs in the UK are not affected at all by migration policy changes, meaning that highly skilled EEA RMW would have increased at the same rate regardless of policy changes. Given the lack of a counterfactual scenario, it is not possible to rule out this possibility.

Key statistics from the report include:

Highly educated RMW (left full time education at age 21 or later)

  • The total number of highly educated RMW decreased from 338,000 in 2007 to 188,000 in 2010 (44% decrease), the lowest estimate for the 2007-2013 period. The number for 2013 was 242,000, a reduction of 28% compared to 2007 and a reduction of 10% compared to 2011. This does not indicate a reduction in the total stock of highly educated migrants working in the UK, but just a reduction in the recent arrivals (i.e. those migrant workers who arrived to the UK less than three years ago).
  • The number of highly educated non-EEA RMW - this represents those who have been most affected by recent government policies designed to decrease net migration - decreased from 155,000 in 2007 to 109,000 in 2010, a 30% decrease. This number decreased further in 2013 to 94,000, a reduction of 39% compared to 2007 and a reduction of 39% compared to 2011.
  • The number of highly educated Old EU RMW decreased from 61,000 in 2007 to 33,000 in 2010, a 46% decrease. The number increased to 78,000 in 2013, an increase of 28% compared to 2007 and an increase of 53% compared to 2011.
  • The number of highly educated A8 RMW decreased from 111,000 in 2007 to 37,000 in 2010, a 67% decrease. This number was 54,000 in 2013, a reduction of 51% compared to 2007 and about the same value as 2011.

RMW in top occupations ('Managers, Directors and Senior Officials', 'Professional Occupations')

  • The number of RMW in the top two major occupation groups (i.e. 'Managers, Directors and Senior Officials' and 'Professional Occupations') decreased from 125,000 in 2007 to 79,000 in 2010 (37% decrease), the lowest estimate for the 2007-2013 period. The number for 2013 was 97,000 a reduction of 22% compared to 2007 and a reduction of 6% compared to 2011.
  • The number of non-EEA RMW in the top two major occupation groups decreased from 82,000 in 2007 to 49,000 in 2010 (40% decrease), the lowest estimate for the 2007-2013 period. The number for 2013 was 44,000 a reduction of 46% compared to 2007 and 32% compared to 2011.
  • The number of Old EU RMW in the top two major occupation groups decreased from 31,000 in 2007 to 15,000 in 2010 (52% decrease), the lowest estimate for the 2007-2013 period. The number for 2013 was 45,000, an increase of 45% compared to 2007 and 50% compared to 2011.
  • The number of A8 RMW in the top two major occupation groups is very small and estimates are not considered reliable for comparison across years.

Highly educated share of RMW

  • The share of all RMW that is highly educated increased from 50% in 2007 to 60% in 2013. That is, the reduction in non-highly educated RMW was greater than the reduction in highly educated RMW for the 2007-2013 period.
  • The share of non-EEA RMW that is highly educated increased from 58% in 2007 to 68% in 2013.
  • The share of Old EU RMW that is highly educated saw little change, from an estimated 70% in 2007 to 69% in 2013.
  • The share of A8 RMW that is highly educated increased from 36% in 2007 to 47% in 2013.

 

Highly Skilled Migration

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