I’ve got a new paper out in the IZA Journal of Migration.
It’s about high skilled migrants – by which I mean people with a degree, with specialist skills (e.g. scientists) or with rich experience in (say) entrepreneurship. It’s based on some recent work for the UK Government’s Migration Advisory Committee.
In the UK, immigration is once again a top 3 issue for public opinion, it’s pretty important to gather what evidence we have.
Here’s the abstract:
In recent years, the economics of migration literature has shown a substantial growth in papers exploring host country impacts beyond the labour market. Specifically, researchers have begun to shift their attention from labour market and fiscal changes, towards exploring what we might call ‘the wider effects of migration’ on the production and consumption sides of the economy – and the role of high-skilled migrants in these processes. This paper surveys the emerging ‘wider impacts’ literature, including studies from the US, European and other countries. It sets out some simple, non-technical frameworks, discusses the empirical findings and identifies avenues for future research.
Thanks to the joys of Open Access, you can read the whole thing here. In case you don’t have time, here are some of the main points:
1/ Skilled migrants now comprise around 30% of OECD migrants – that’s 25% more than in 2000/1. And the future trend is upward.
2/ We know quite a lot about immigration’s impact on wages and jobs (positive on the average, but more serious for some low skilled workers). However, we know almost nothing about the wider impacts of immigration – on productivity and its drivers, and on housing or public services – where high-skilled migrants are going to be central.
3/ To get a sense of these impacts, we need to think about immigration in terms of economic growth – that is, as a factor in production and something that shifts the size and composition of local populations.
4/ In theory, these wider impacts are ambiguous. For example, more diverse workforces could generate more new ideas; but diverse teams could have communication problems or lower trust.
5/ In practice, the international evidence suggests that aggregate wider impacts are positive (gains outweigh losses). In places like Silicon Valley, high skill migrants are a driving force in the local economy.
6/ That’s encouraging for pro-migration voices in the UK and elsewhere, but we still need much more evidence. In particular, we need to know more about the winners and losers in these aggregate outcomes.
7/ Ideally, the UK and other countries would develop experimental policies for high-skilled migrants, enableing us to cleanly identify these effects. Turning the Tier 1 entrepreneur route into a proper Startup Visa is one obvious option. Creating a market for wealthy investors via visa auctions is another. Both could allow for evaluation through randomised trials or quasi-experimental approaches. But the current politics of immigration are making this kind of thing increasingly difficult to do.