TWRI annual research conference: Newcastle 2 December 2008

International migration: local policy issues in changing places and times

Mike Coombes Tony Champion CURDS Newcastle University

Acknowledgements: Emmanouil Tranos and Simon Raybould

and numerous other CURDS colleaguesplus funding for related research from

ODPM (now CLG) + EUROCITIES + Gateshead MBC

There are four sections to the presentation, with a distinct objective in each

1) rehearse ideas about migration and economic development in past research,highlighting key uncertainties, especially about the ‘applicability’ of

policy implications to areas like Tyne & Wear (and perhaps in times of recession)

2) look across Europe at the most recent data available to see the patterningof migration and its impacts at a city region scale, so as to recognise howfar a migration policy in Tyne & Wear works with/against established trends

evidence: CURDS study for EUROCITIES

3) look across England at the early A8 migrant inflows to understand how fargeneralisations from other research were echoed in this new phenomenon

evidence: CURDS study for ODPM (now CLG) and academic follow-up

4) look at experience this year of migrants, employers and various agenciesin part of Tyne & Wear to ‘ground truth’ some implications from the above

evidence: CURDS study for Gateshead MBC

Aims of the presentation, and evidence base drawn upon

Migration flows are people ‘voting with their feet’ and show an area’s relativeattractivity in a highly practical sense

Compared to ageing or other forms of demographic change, migration is by farthe most dynamic process in its potential to alter an area’s labour marketsize and characteristics (eg. skill levels)

SO to consider the impact of NET in-migration and thus population gain…

An overall net in-migration usually embraces selective in-migration and thatraises the number, and share, of the more highly-skilled in the workforce

Gains in population size stimulates consumer expenditure locally and in turnthis has a ‘positive multiplier’ effect on the local economy

Population growth may lead the private sector to gain confidence in the area

Growth in population (and perhaps employers) raises municipal fiscal strengthand thereby increases resources available to fund economic development

1) Why is migration relevant to economic development?

International migration inflow: local/regional impacts

British policy debate on labour market impacts of international migrant flows has

been dominated by research commissioned/undertaken by DWP that show…

the link between migrant inflows and national economic growth

a link with eased labour supply constraints, and also wage rate moderation

these processes mainly operating in lower-skill segments of the labour force

The latter impacts will vary sub-regionally as this is not a very mobile workforce, and this implies mixed impacts on local residents – in the short-term at the very least – with negative effects for lower-skill workers [work by Warwick University has seen this]

There are possible positive longer-term effects of increased growth [case study work for EUROCITIES supported this assessment] BUT if the impacts are mainly on low-productivity sectors then local industries surviving increased global competition may actually keep areas stuck in a low skill equilibrium

If the migrants are very mobile they may be unlikely to settle – as with the flow through London from abroad and other UK regions – which means a policy for migrant attraction will need to permanently replenish the migrant inflow

! This is basically the question that the presentation will return to at the end !

The conventional understanding from neo-classical economics, and modelledby regional science, sees net migration flows mainly as people respondingto labour market ‘signals’ (primarily better prospects for well paid work)

On this basis, economic development policy stimulates the local economy andnet in-migration will follow (eg. New Towns having to attract employers);the multiplier effect then gives additional rounds of growth and migration

If the growth is in ‘advanced’ sectors then the net in-migration is selective andthis may well increase the multiplier effect (as highly-skilled = highly paid)

However an alternative emphasis has come from Richard Florida (especially): areas FIRST attract and retain talented/skilled/creative migrants THEN themigrants enhance growth via innovation (boosting local productivity level)and/or entrepreneurialism (boosting stock of firms with growth prospects)

In a ‘policy prescription’ Florida says migrants want diverse and tolerant areas

Can local/regional policies alter migration patterns?

Migration analysis linked to economic development

In practice the Florida notion must be seen as supplementing the conventional model because it is proposing a group of migrants as the reason why some areas have faster growth in productivity and/or enterprise (which then will stimulate further migration and growth as the conventional model says)

Thus it is difficult to assess how far evidence supports the Florida notion since this requires carefully disentangling ‘leads and lags’ in an on-going process (with ‘feed-back’ via the multipliers etc)…and then there’s data availability…

Carrying out such analyses in relation to international migrants to local areas faces an impossible challenge in terms of data availability broken down by:

age / sex / family status (eg. whether any accompanying dependents)

nationality / country of birth and date of arrival in current location

local area lived / worked in currently

economic activity / skill level / ‘creativity’ / entrepreneurialism

and so on…

Migration analysis re: economic development

YES Florida and colleagues have carried out sophisticated analyses of the links at the city region scale between the proportion of the local labour force who are highly educated and/or creative – and the level of tolerance in the area – and the productivity and growth rate of the local economy

BUT these analyses are of the USA in the last few years and they highlight the factors associated with growth in certain ‘advanced’ cities and their regions where migrants have gone voluntarily (ie. without any policy inducement) during a period when the national and international economy was booming

SO the questions are how far is it possible for a policy

> to influence migrants (rather than passively observe migration patterns)

> given that people in Europe are generally less migratory than those in USA

> and European international migrants may need to cross a language barrier

> especially if their area has the characteristics of an older industrial area

> especially when the national and international economy is not booming?

2) International migration: what is the evidence?

Migrant groups differ greatly in terms of their economic development impacts

the higher-level skilled, perhaps moving within a corporation vs. the rest

those who stay only short periods (even ‘gap’ years) vs. those who settle

those who are single (and probably young) vs. those with dependents

Important recent and on-going changes to the regulatory context

proposed new system based on skills (eg. English proficiency)

Scotland’s pro-migration policy for economic development

adjustment to A8 migration from east/central Europe post-’02

Limited statistics on migration (even less on economic development impacts)

agreed need for much improved UK data on international migration

key UK problem of A8 data source (WRS): the outflows are unknown

Cities with data on non-nationals (and other factors)NUTS3 regions including (most of) the city region surrounding a medium-sized city (ie. an urban area with at least 200,000 but no more than 1.6million residents).

200 candidate city regions (as defined in above note);

100 with data on 2001 % non-nationals (none in UK);

60 also with data on 2004 from which 2001-4 change can be measured

Location factors and migration-intensity up to 2001

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Objective 1

not so

Pentagon

not so

border

not so

% of cities in the category

lowest low high highestmigration-intensity quartiles:

SO: migrants gave gone to prosperous regions

Location factors and migration-intensity 2001-4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Objective 1

not so

Pentagon

not so

border

not so

% of cities in the category

lowest low high highestmigration-intensity quartiles:

SO: migrants still going to prosperous regions

Other factors and migration-intensity up to 2001

-0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5

urbanisaton

agriculture

production

population size

population growth

GDP/head growth

accessibility by air

Spearman's rho grey bar = non-significant

SO: migrants went to urbanised regions with good air links to the rest of Europe and few farms etc.

Other factors and migration-intensity 2001-4

-0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5

urbanisaton

agriculture

production

population size

population growth

GDP/head growth

accessibility by air

Spearman's rho grey bar = non-significant

SO: migrants increasingly going to larger cities, and to city regions with larger populaitons

2001 migration-intensity and ‘downstream’ issues

-0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5

GDP/head change

change in % low skill

change in % high skill

change in % aged 25-54

change in % econ.active

change in % 55-64econ.active

% unemployed

change in % unemployed

Spearman's rho grey bar = non-significant

SO: prosperous regions (with more migrants) have not grown economically as quickly: “convergence”

2001-4 migration-intensity and ‘downstream’ issues

-0.7 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7

GDP/head change

change in % low skill

change in % high skill

change in % aged 25-54

change in % econ.active

change in % 55-64econ.active

% unemployed

change in % unemployed

Spearman's rho grey bar = non-significant

SO: prosperous regions (where migrants still went) grew economically less quickly: “convergence”

Summary conclusions from EUROCITIES evidence

Migrants tend to flow towards more affluent city regions

This pattern remained true even in recent years when there has been “convergence” in Europe: thus the migrant flows are less towards areas growing fastest than to those with high prosperity levels already

The implication for city regions like Tyne & Wear is that they are not very likely to attract many migrants from more affluent parts of the world, and migrants to the UK may not choose to go to an old industrial region

Inflows continue, from less affluent regions, even when a region is not growing as quickly as elsewhere and this does not necessarily stimulate relative growth (but the skill/creativity of these migrants is not known)

BUT do these conclusions – which tend to cast doubt on international migrants coming to Tyne & Wear – square with evidence that recently many migrants did in fact come, from the A8 countries in particular?

The next section of the presentation looks at the A8 migrant inflow in detail

3) Evidence on A8 / other migrants to this country

x

-50

0

50

100

150

200

250

300

1991 1993 1995 1997 1999 2001 2003 2005 2007

tho

usa

nd

s

NET international migration inflows to UK 1991-2007

Evidence on A8 migrants

Migrants from the “A8”countries: 8 former eastern bloc countries joining EU in 2003 (nb. 2 other countries joining at the same time – Malta & Cyprus – are excluded since their Commonwealth status had given their citizens UK labour market access for a long time)

Predictions of A8 migrant numbers (made before 2003) proved far too low because the calculations did not reckon on other western European countries deciding not to admit A8 labour migrants

The data source used here counts A8 migrants who register in the Worker Registration System: (they had all got jobs after entry)

Czech Rep

Estonia

Hungary

Latvia

Lithuania

Poland

Slovakia

Slovenia

Much misinformation on A8 migration

“In just over a year and a half – according to the local council – at least 3000 incomers have arrived in the town. They already make up 6% of the population - and they’re all from one country: Poland.”Poles come to Crewe, BBC News, 20.1.06

What is known about A8 migrants?

No data on A8 migrant ‘stock’ in the UK at 1 time (ie. a Census equivalent)

Data available from the Worker Registration Scheme (WRS) measures ‘flow’

No information on how long people stayed; many in WRS data may have left

Some A8 migrants not in WRS (eg. self-employed or working illegally)

By end 2005:

345,000 applicants (up to 30% had been in UK before May 2004)

83% of registered workers were aged between 18 and 34

97% had no dependants living with them in the UK

57% were male

seasonal labour (eg. agriculture-related 7 hospitality) gives summer peak;each year’s peak has been higher than the one before

The question: have A8 migrants gone were they will helpsolve labour shortages? (nb. few A8 migrants solved skill shortages, as most found only low skill jobs)

Where have different groups of migrants gone?2007-08 labour market entrants: newly registered National Insurance numbers (NINOs) from outside UK [by size of 1998 TTWA (approximated by LA grouping)] Location Quotients (LQs) = ratio of the actual number to the expected number

x

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

London Other1m+

0.7-1.0m

0.5-0.7m

0.4-0.5m

0.25-0.4m

125-250k

<125k

Lo

cati

on

Qu

oti

ent

EU Accession Other foreign

Statistical analysis of where A8 migrants went

For all A8 migrants (& sub-groups by job* type or nationality)

~ place each migrant to England in a local authority, then group this dataset to LLMs: the 170 LLMs are local authority areas

‘best fit’ into 1998-2007 Travel-to-Work Areas across England

~ calculate location quotients (LQs): this is the ratio producedby dividing the LLM share of migrants by its share of all jobs

~ correlate these LQs vs. the LLMs’ employment rates, where theemployment rate is the key measure of labour market tightness

~ carry out regression analyses to consider other factors driving the patterns of A8 migration inflows across England’s LLMs

* job types devised from detailed examination of the non-standard data on the work A8 migrants are engaged in (eg. “Barrister – waiter”)

Job types identified by CURDS

A8 job type n (England) % total

managers and (semi-)professional workers 3374 1.8

other office-based workers 8182 4.4

hospitality/leisure/retail/wholesale workers 57178 30.4

personal service and domestic workers 18232 9.7

mechanics and transport/construction workers 15159 8.1

manufacturing/process/other low skilled workers 57027 30.3

agricultural and food processing workers 28806 15.3

A8 migrants, May’04-June’05 [LQs by separate LAs]

Employment rate measure of tighter labour markets

Correlation between LLMs’ total A8 migrant LQsand their employment rates only r = 0.09

On its own then, the relative tightness of labour markets does notsubstantially ‘explain’ the pattern of A8 migration

This might have been because the total A8 inflow comprises a rather diverse mix of nationality and job type groups, but detailed results show that there is no large groups whose LQs are very highly correlated with LLMs’ employment rates

In reality, we know there are will be many different factors shaping the A8 migration pattern because ‘push’ and ‘pull’ drivers have a diverse impact on all migration flows

This means that it is necessary to move to a multivariate analysis such as regression modelling to assess the level of influence of labour market tightness, when other factors are accounted for too: results from this follow

Technical note: the models have the observations weighted by LLM size so the emphasis

is on predicting the values of larger areas, this indirectly causes

every independent variable to be significant at 1%); the models

are constrained to pass through the origin (ie. no constant)

Modelling strategy: independent variables

Explanatory factor  Relationship with A8 in-migration LQs: Expected sign

Labour market % 16-PA employed 2003/4 +

  % unqualified 16-PA employed 2003/4 +

  % all 16-74 unqualified 2001 ?-?

Industrial structure % employed in agriculture etc 2001 +

  % employed in manufacturing 2001 +

  % employed in construction or transport 2001 +

  % employed in retail or hospitality 2001 +

  % employed in non-’A8intensive’ sectors 2001 -

Local context Unaffordable Housing Index 2003 -

  % non-White 2001 ?-?

Previous migration Net intra-UK migration rate 2002/3 +

  Net international migration rate 2002/3 +

  % born in East Europe 2001 +

Overall results [adjusted R squared = .33]

Explanatory factor  Relationship with A8 in-migration LQs: Standardised ß

Labour market % 16-PA employed 2003/4 +2.625

  % unqualified 16-PA employed 2003/4 -0.120

  % all 16-74 unqualified 2001 +0.543

Industrial structure % employed in agriculture etc 2001* +0.391

* strongly negatively  % employed in manufacturing 2001 -1.071

correlated vs. CURDS % employed in construction or transport 2001 -0.078

  Urbanisation Index % employed in retail or hospitality 2001 +0.604

  % employed in non-’A8intensive’ sectors 2001 -3.382

Local context Unaffordable Housing Index 2003 -0.384

  % non-White 2001 0.155

Previous migration Net intra-UK migration rate 2002/3 +0.157

  Net international migration rate 2002/3 +0.192

  % born in East Europe 2001 +0.980

retail/hos. manufac. agric.

independent variable stand. ß stand. ß stand. ß

% 16-PA employed 2003/4 +2.091 +4.489 -2.221

% unqualified 16-PA employed 2003/4 -0.373 -0.270 +0.379

% all 16-74 unqualified 2001 -0.797 +1.222 +0.314

% employed in agriculture etc 2001 -0.086 +0.251 +0.672

% employed in manufacturing 2001 -0.996 -1.072 +0.036

% employed in construction or transport 2001 -0.922 -0.306 +0.737

% employed in retail or hospitality 2001 +1.685 +0.029 +0.410

% employed in non-’A8intensive’ sectors 2001 -2.141 -3.787 -0.474

Unaffordable Housing Index 2003 +0.566 -1.191 +0.075

% non-White 2001 +0.021 +0.175 -0.019

Net intra-UK migration rate 2002/3 -0.002 +0.147 +0.193

Net international migration rate 2002/3 +0.051 +0.104 +0.231% born in East Europe 2001

stand. R squared

+1.144

.79

+0.624

.17

+0.261

.29

Summary of evidence about A8 migrant inflows

LM tightness [employment rate] is the second strongest influence

(preceded by avoidance of areas with non-A8intensive sector jobs, and followed by avoiding areas with many jobs in manufacturing (etc)

Retail/hospitality is the 1 group which can be modelled very robustly: the key drivers are similar to those for the total A8 migration flow

Manufacturing worker distribution is not modelled at all successfully

MOST migrant groups are attracted to areas where in 2001 more people born in E.Europe (or their own country, if known) already lived;

Old industrial areas tended not to attract A8 migrants

Need better quantitative data than is yet available

How long do A8 migrants stay (a) where they ‘arrived’ (b) in the UK?

What are the commuting patterns of migrants (eg. those with agencies)?

Do migrants who stay tend to move into more appropriately skilled jobs?

These questions need to be addressed through detailed study in one area

4) What is the evidence from within Tyne & Wear?

CURDS examined the potential of a Talent Retention policy for Gateshead and sought evidence on the potential for policies to

attract more migrants and/or a higher share of more highly-skilled migrants

enable migrants to find work which is suited to their skill levels, and also

encourage migrants to remain in the area, contributing to the economy

An overview of available data estimated the likely annual number of potential beneficiaries of a policy aimed at retaining in the area international migrants with higher levels of skill

Surveys explored the current pattern of experience of

international migrants

local employers who recruit them

various agencies who work with them

International migrants within an ‘upskilling’ strategyThere are many (larger) groups in a future talented Gateshead labour force

Birth placecurrent location current activity potential policy

Gateshead region Gateshead region talent-based work retention

Other types of work life-long learning

Study recruitment

inactive (engagement)

Elsewhere talent-based work diaspora attraction

others n/a

rest of the UK Gateshead region talent-based work retention

Other types of work retention(?)

Study recruitment

others n/a

Elsewhere talent-based work attraction

others n/a

rest of the world Gateshead region talent-based work *RETENTION*

Other types of work retention(?)

Study *RECRUITMENT*

others *ENGAGEMENT*

elsewhere talent-based work attraction

others n/a

nb. ENTRIES IN THE “policies” COLUMN IN CAPITALS ARE OF CORE INTEREST HERE entries in the “policies” column shown in italics do not directly relate to talented people

International migrants: the past record of Gateshead

Gateshead has little diversity in its population (even less than the rest of the NE)

Diversity of 2001 populations as indicators of possible past migration

% residents [*economically active residents]

ethnicity not White British

country of birth outside

UK

* living abroad 12 months previously

Gateshead 3.08 2.30 0.21

NewcastleGateshead 6.69 4.66 0.59

Tyneside 5.20 3.69 0.47

England & Wales 12.34 7.90 0.76

International migrants: likely future for Gateshead

National forecasts are of a net LOSS of cross-border migrants for Gateshead

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

2007 2011 2016 2021 2026 2031

Gateshead NewcastleGateshead Tyneside England

International migrants: what might happen next year

Groups have very different annual inflow numbers and probable skill levels

Speculative estimates of 2007-8 number of talented economic migrants

Gateshead [NewcastleGateshead]

asylum-seekers

overseas students A8/A10

others (NINo) Total

outside the labour market at the start of the year

250 [1250]

100 [5000]

potential recruits into the local labour force 50 [250] 50 [2500] 120 [480]

900 [3000]

1120 [6230]

likely to want to settle for several years at least 40 [200] 20 [1000] 40 [160]

600 [2000] 700 [3360]

likely to be talented 20 [100] 20 [1000] 10 [40] 150 [500] 200 [1640]

What then are the implications for Tyne & Wear?

What are the impacts of international migration? migrants mostly get low-skill work (some well qualified but ‘doing a gap year’)

impacts are negative for low-skill locals, at least in the short-termimpacts may be positive longer-term (or ‘lock’ area in low-skill

activities) diversity of area increasesimpact in short-term may be negative for community relationsimpact in longer-term may be more likelihood of attracting

‘creatives’

What are the prospects for policies to reap benefit from international migration? all the evidence (including from surveys in Gateshead) shows that net inflows will increase with better job prospects: increased numbers follow from areas moving up the affluence rankings (rather than affluence following the inflows); the same seems to apply to retaining migrants so they benefit the economy

getting a higher share of more highly-skilled migrants (as Florida) in this area will in practice depend on (a) tapping the resource of the student inflow and/or (b) attracting back the ‘Geordie diaspora’ [maybe the 1 option whose chances have been improved by the economic slowdown as it is hitting London harder]

migrants to Gateshead [barely any ‘Florida-like’] reported few problems with community hostility / housing / schools BUT better integration of services may ease arrival, and help with English remains vital (eg. work-related provision)

Annex: WRS data: records of gate-keeping

CURDS analyses cover WRS data up to end June 2005

Postcode District (eg. NE4) of registration address

Gender Date of Birth Nationality

Outcome of Application

Number of Dependents (by whether under 16)

NOTHING on qualifications

Job Title & Job Description [not standard categories]

for example:other legal occupation – poultry catchermagician – production workerbarrister – waiter