Jun 29, 2013

Immigration To UK And Its Economic Impact

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Immigration to UK has been rising since 1995. The trend of immigrant inflow has been decreasing since 2006, but since immigrants are staying longer the number of immigrants in UK is continuing to rise. The score of United Kingdom in economic freedom is 74.8 making its economy the 14th freest in the 2013 Index. The country is ranked 5th out of 43 counties in the European region.

With contracts and property rights enforced properly by an effective legal system, the UK has

always welcomed global trade and investment. Measures undertaken in fast few years include ways to control the growth of government spending and the series of corporate tax deductions and it will continue until 2014. According to survey in 2012, 14.5% of the UK’s working age population had been from other countries. There are now 5.9 million adults of working age in the UK who were born abroad.

Immigrants are more educated than the youngsters working in UK. Among 10% of all migrants are in full-time education. Most of them qualify for very high-skilled and high-skilled professions. The biggest proportion of new arrivals is from countries like Poland, India and China. Immigrants are less likely to use social housing than the residents of UK, even when the applicant is from a developing economy.

There are numerous economic advantages associated with migration such as filling gaps in developed labor market of UK.

The labor market costs and benefits of immigration:
The trend of immigration to the UK prefers skilled workers unlike in United States where the trend of immigration is tilted towards the unskilled. There may not be an effect on wages and employment when demand for workforce is rising. An open economy may adjust by means other than wages: one such mechanism is adjustment by changing the mix of goods the economy produces.
The impact of immigration in a country where the applicant is at full employment will be different from the condition when labor demand exceeds the labor supply. When output is controlled by demand, the substitution of indigenous workforce becomes rampant.

Importance of Migration in UK labor market:
Migration has always been significant for filling gaps in market in countries with strong economies. But, the UK labor market has always suggested that apprehensions regarding consequences of rising immigration have been exaggerated. Applicants, especially in recent years, tend to possess better educational and practical skills than the residents of UK and therefore are less likely to be unemployed.