The Impact of Immigration on the UK Economy

This report examines the impact of immigration on the UK economy, including its effects on population, wages, productivity, economic development, and tax revenue. It discusses the positive and negative aspects of immigration and provides a summary of the literature on the topic. The research methodologies used are quantitative and qualitative techniques, and data is collected from secondary sources. The report concludes with an evaluation and reflection on the research.

The impact of immigration on
the Uk economy

Contents
INTRODUCTION...........................................................................................................................1
Research aim................................................................................................................................1
Research objective.......................................................................................................................1
LITERATURE REVIEW................................................................................................................1
The impact of immigration on UK economy...............................................................................1
The optimistic and negative impact of immigration on UK economy........................................2
RESEARH METHODOLOGIES....................................................................................................3
SUMMARY OF LITERATURE.....................................................................................................4
EVALUATION...............................................................................................................................5
REFLECTION.................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Research skills are the skill to search for, extract, organise, assess and locate as well as
utilisation of permanent data that is reliable to the particular subject. It considers research,
intensive search and critical analysis basically in response to the specific research question and
hypothesis (Gudgin and et. al., 2019). Also, there is Academic research which is a particular type
of research that is the procedure of methodical and brief research into area of investigation.
Research skills are the skill to find out solutions to the issues and answer to the question. It
consists gleaning of data, reviewing that information and then interpret the information for
bringing solution to the issues and complexities. The topic which is considered in this report is
“The impact of immigration on the UK economy. There are several literatures associated to the
topic. Moreover, the assessment will discuss about the research methodologies, summary of
literature review, evaluation and reflection.
Research aim
The aim of the report is, “To determine the positive and negative impact of immigration on
the economic system. A case study on UK.”
Research objective
 To analyse the impact of immigration on UK economy
 To determine the optimistic and negative impact of immigration on UK economy.
LITERATURE REVIEW
It refers to the written overview of major writings and other sources on a chosen subject.
Basically, it states to a survey of scholarly sources on a particular topic (Minford, 2019). It offers
an overview of current knowledge and providing detailed information regarding the specific
theme.
The impact of immigration on UK economy
In the past two decades, the UK has experienced a stable flow of net migrants into the
economic system. This immigration has had a wide ranging influence on the UK population,
wages, productivity, economic development and tax revenue. As per the view of Pettinger T.
(2019), the immigration had form impact in diverse manner on UK economy which is as:
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Increase in labour force- Immigration is more likely to be of working age. The majority
of migrants come for work of study. They may bring dependents but basically net immigration
directs to a maximisation in the labour force, a reduction in the dependency ratio and increases
the potential output of the economy.
Increase in aggregate demand and real GDP- Net inflows of individual also direct to a
maximisation in collective demand (Portes, 2018). Migrants will enhance the total spending
within the economy. As well as maximising the supply of labour, there will be an increment in
the demand of labour, associating to the maximised spending within the economy.
In Fact, net migration can make economic development look stronger then it is, In the
duration of 2005-2015, UK real GDP has maximised significantly rapidly than GDP per head.
The optimistic and negative impact of immigration on UK economy
Mainly immigration creates unfavourable impact on the economic system of a nation in
diverse term but some time it also form optimistic influence. Accordant to, Portes J. (2018)
Immigrants also bring a wave of talent and ingenuity, accounting for a disproportionate share of
employees in the areas most closely tied with creation. For example, As per a survey which is
conducted in 2011 of the top fifty venture capital financed organisation found that half had at
least one immigrant founder and three quarters had immigrants in to top administration or
research position (Jaeger, Ruist and Stuhler, 2018). This makes an effective contribution in the
development of the economic system of UK. Due to immigration, particularly of talented
migrants may direct to benefits by a changing impact on development, technology and
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innovation. For example, by introducing additional information and creation, resulting in
increased average wages and employment in the long run. Moreover, the accessibility of migrant
labour may also in some cases minimise incentives to improve the efficiency of employees and
the dynamic advantages.
As per the view of Pettinger T. (2019), with an ageing population, the UK is forecast to see a
maximisation in the dependency ratio However, immigration assist to minimise the dependency
ratio. Migrants are a source of working age individual and this enables to minimise the ratio of
retired to working individual (Hantzsche, Kara and Young, 2018). This has advantages for the
government’s budget. If migrants are of working age, they will income tax, VAT etc. Along with
this, in negative term, due to immigration, the unemployment rate for immigrants tends to be
higher than for UK born employees. This can affect the economic development of UK economic
system.
RESEARH METHODOLOGIES
The research is conducted by the use of two different research techniques. They are defined
as under:
Quantitative techniques- This tool is being used for gathering of data within the close ended
system. The rationale behind opting for this method is to collect information by the use of graphs
along with numbers (Floyd, 2019). This limits representatives from responding with the use of
pre described alternatives which are being provided to them and cannot offer their suggestions in
context of specific concept.
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Qualitative techniques- This method is responsible for highlighting on have perception into
individual’s opinion as well as thoughts. Thus, the questions are open ended that according to
their ideas the answer can be written through them. The outcomes will be determined by
summarization as well as analysing assumptions that will be acquired.
Data collection indicates to technique by which data can be collected for organising
investigation in effective manner as well as carry out interpretation of the findings (Foged,
Hasager and Yasenov, 2019). The methods related with data gleaning are defined as under:
Primary method- It is also denoted to as pure and first hand information and this method is
being used when information will be collected within first time. The key sources that are
considered within this case comprises of surveys, questionnaires as well as interviews. But this
tool of data collection is time taking along with this reliability will be greater.
Secondary method- This source is responsible for assembling data by utilisation of pre-
existent sources along with materials. In this case, sources that are basically used includes of
books, journals, articles, publications, handbooks and many more.
In context of this research, the secondary sources of information collecting will be utilising
because this leads to save amount of time and along with this reliable data can also be
accomplished with the topic. The reason behind this method or source for collecting information
is pandemic situation that prevails globally and also have made an influence on the modes within
investigation is being carried out.
SUMMARY OF LITERATURE
From the above mentioned literature, it can be summarised that fiscal influence of
immigration requires a comparison of the costs of public finances and advantages utilised
through migrants and the taxes and other contributors they make. Profits and earning from
migrants consider taxes they pay instantly such as income tax national insurance and VAT but
sometimes unmitigated to consider shares of taxes paid by UK businesses. Along with this, it has
been also summarised form the above information of the mentioned literature that the main
impact which is held on economic system of UK due to increase force of labour, because there is
the ratio of working labour is high in compare to born people of UK (Portes, 2019). This create
an direct impact on the economy or financial system because when the individuals are working
then they pay tax and other kind of fiscal cost which is charged by the government on them. This
makes a high contribution in the economic development. For example, immigrants who reached
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after 1990 were 45% less likely to receive state advantages or tax credits than UK natives in the
duration of 2000-2011. In current era, claiming unemployment benefits in the UK is rather strict;
the claimant count measure of unemployment is much less than the labour forces survey. It can
also analysed form the literature that migrant’s utilise of public services and advantages that also
based on their age and household. In UK, immigration create a direct impact in optimistic term in
the economic system of particular nation through its expenditures that are made by them in term
of purchasing goods, paying tax and many more.
Also, there are some other factor of immigration which impact the economy like most
immigrants arrive in the UK after competing their education aboard, and thus at a point in their
lifetime where the discounted net value of their future net financial payments. The impact of
migration on the GDP can be analyse by determining the capital labour ratio, average human
capital per worker and total factor productivity of the nation (Fox, 2018). Apart from this, it can
also be analysed that the net inflow of people also lead to increment in collective demand. When
maximisation of supply of labour, there will be increasing demand of labour relating to increased
expenses on the economy. When the demand of supply is high then the GDP is developed per
head. Along with this, there are diverse term through which immigration affect the financial
situation of a nation in both favourable and unfavourable manner.
EVALUATION
The secondary information that is considered is more relevant as reliable because this helps
within having specific acknowledgement associated with the investigation goals in the clear
form. Within the pandemic situation which is arise due to corona virus; this is not feasible to
consider primary sources of data assembling. Thus, with reference to this research, it is more
probable and accurate to assure the utilisation of sources that have been published within diverse
tools or mediums. This research require ample of reliable facts along with figures for carrying
out determination as well as interpretation connected with the findings and results. The assets
which can be obtained by secondary sources are that appropriate information is accessible for
carrying out analysis of research objectives (Gudgin and et. al., 2018). Thus, here ample of facts
have to be included in context of outline reliable conclusions and for this dependability can be
assured through making utilisation of secondary sources. The source that are being used are time
taking but it terms of consistency along with possibility are obtain.
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REFLECTION
In context of the research topic which is on the impact of immigration on the UK economy
by this have enabled me to more information about different aspects connected with this. Mainly
I get aware about the concept of immigration and how it affects the different aspects of a nation.
I gain knowledge about the main impact of immigration of the economic system of UK which is
conducted in term of unemployment rate, taxation rate and many more. Along with this, during
the time of working regarding this topic in context of gleaning brief information about the impact
of immigration on financial system of particular nation, I faced some issues due to searching
deep and accurate data regarding it so that I can offer and provide accurate and reliable
information which assist me in offering relevant information. Along with this, I also aware that
immigration creates positive as well as negative impact such as form the analysis of literature,
there is a big ratio of working migrants in compare to UK born workers. This affects the
development of economic system in negative manner. In term of optimistic form, the migrants
pay more taxes and VAT which make a positive contribution in the development of economy of
UK.
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REFERENCES
Books & Journals
Gudgin, G. and et. al., 2018. The macro-economic impact of Brexit: using the CBR macro-
economic model of the UK economy (UKMOD). Journal of Self-Governance and Management
Economics, 6(2), pp.7-49.
Minford, P., 2019. The effects of Brexit on the UK economy. The World Economy, 42(1), pp.57-
67.
Portes, J., 2018. The economic impacts of immigration to the UK. CEPR Policy Portal,
https://voxeu. org/article/economic-impacts-immigration-uk.
Jaeger, D.A., Ruist, J. and Stuhler, J., 2018. Shift-share instruments and the impact of
immigration (No. w24285). National Bureau of Economic Research.
Hantzsche, A., Kara, A. and Young, G., 2018. Prospects for the UK Economy. National Institute
Economic Review, 246, pp.F4-F35.
Floyd, D., 2019. How has the presence of an increasingly more global labor market softened the
impact of the financial crisis 2008 for the UK economy?. Strategic Change, 28(5), pp.321-323.
Foged, M., Hasager, L. and Yasenov, V., 2019. The role of institutions in the labor market
impact of immigration.
Portes, J., 2019. What Do We Know and What Should We Do About Immigration?. SAGE
Publications Limited.
Fox, B., 2018. Making the Headlines: EU Immigration to the UK and the Wave of New Racism
After Brexit. In Migration and Crime (pp. 87-107). Palgrave Macmillan, Cham.
Online
Pettinger T. 2019. Impact of Immigration on UK Economy. [Online]. Available Through: <
https://www.economicshelp.org/blog/6399/economics/impact-of-immigration-on-uk-economy/>.
Portes J. 2018. The economic impacts of immigration to the UK. [Online]. Available Through: <
https://voxeu.org/article/economic-impacts-immigration-uk>.
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