Impact of Immigration on the UK Economy: A Comprehensive Analysis

This report examines the economic impact of immigration on the UK. It begins with an introduction to immigration and its significance, followed by an analysis of the UK's immigration landscape, including background information and the challenges it presents. The report then reviews relevant l...Read More

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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Introduction to the topic...............................................................................................................3
Background to the problem.........................................................................................................4
Summary of the literature............................................................................................................5
Evaluation of the relevance of the literature sources...................................................................8
References..................................................................................................................................10
PART 2..........................................................................................................................................10
Introduction to the topic.............................................................................................................10
Description of Literature and Data............................................................................................11
Methodology..............................................................................................................................12
Summary of Literature and Data...............................................................................................13
Evaluation of the relevance of literature sources.......................................................................17
Reflection...................................................................................................................................18
CONCLUSION..............................................................................................................................18

INTRODUCTION
Immigration is basically a process in which individuals are considered as the permanent
citizens or residents of another country. Every country has different number of immigrants which
is why the states keep control on their borders so that they become able to monitor and evaluate
the number of immigrants who wish to reside permanently (Wadsworth, 2017). UK is the
country which is facing steady flow of migrants in the economy. This contributes greatly to the
economy of the country. Many measurements are introduced regarding the same for increasing
the inflows. The report will shed light on the impacts of immigration in UK. Various literatures
will be gone through and reviewed in order to gain deeper insights about the topic. The various
literatures will help in critically analysing the impact which immigration has on the economy of
UK.
PART 1
Introduction to the topic
It needs a correct mix of skills to analyse and present the impact of immigration on UK
economy which can help in creating wealth, enhancing productivity and the employment. The
point system can be the most effective method to help those people and to meet the needs of
those who come to UK for the purpose of study and work and also ensuring them with their
rights to stay.
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Background to the problem
These include offering humanitarian protection to those people who require fleeing and
sanctuary persecution. Also, for welcoming the loved and near dear ones of the citizens of UK
and those who have already taken the permission to live in UK and they wish to re-unite with
their family members. The major things which are highlighted by the immigration in UK are that
the skills and labour shortages are filled; fiscal benefits are provided to the government and
many more. Various literature sources will be gone though in order to analyse the impacts which
immigration has on the economy of UK.
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Summary of the literature
The determinant of success can be the GDP per capita growth. After the immigration in UK, the
country faced a rapid growth regarding the GDP as compared to all other countries. This also
enhanced the earnings of the residents in UK. The employees got various opportunities in the
labour market which helped in improving the match between the labour which was available in
UK and the vacancies. This is how migration contributed by decreasing the inflationary pressure
in the labour market of UK. This also led to innovation as the existing workers got the
opportunities to interact and exchange ideas with the immigrant workers. The new ways of
working helped in increasing the productivity of the organisations.
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In the absence of migration, the economic growth of the country could be slower, inflation could
be higher and the interest rates also could be higher as compared to after migration. This was
clearly identified that the immigrants were mostly belonging to the working age which increased
the labour and the output capacity of the organisations.
But if the country or the state can increase the age of the state pension then this problem can be
solved. ON the ageing population, migration can be able to solve these issues but without
migration it is impossible to even think about the same.
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The migration also led to increase in the population which increased the demands for the houses.
It put a downward pressure on their wages as the country got more skilled workers from many
other countries which helped in filling the job vacancies. It also affected the technological
changes, the national minimum wage and the policies on the tax credits.
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However, the migrants made a greater fiscal contribution than the non-migrants.
Evaluation of the relevance of the literature sources
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CRAAP test consists of set of evaluation criteria which can be applicable to the articles, websites
and the other sources of information for determining that the information gained is reliable or
not. It stands for Currency, Relevance, Authority, Accuracy and Purpose.
The matters of currency also related to the topic of the research which is the impact of
immigration on the UK economy.
There are no credentials handed over by the authors as the literature sources were already written
by the authenticated publishers. The publications were reputable.
The peer reviews were examined which were able to reach to significant conclusions.
Multiple view points were presented in different literatures regarding the same problem or issue.
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References
PART 2
Introduction to the topic
The main work which will be done in the report will be to analyse the impacts due to
immigration on the economy of UK. Literature review will be done so that there can be enough
data to obtain the optimal results and significant outcomes. The literature review will be focussed
on the immigration which is actually done by the people by entering the country when they have
the intention to remain there permanently. There are certain objectives behind doing the literature
review regarding the immigration in UK and evaluating its impacts:
 To help the migrants in making positive choices through providing information.
 To develop understanding and raise awareness regarding the migration issues so that such
society can be built where competent and knowledgeable services are available to meet
the migrants’ needs.
 To improve the justice access by referrals and signposting to various immigration and
legal services along with the casework support.
 To facilitate the provisions of mainstream such as employment, healthcare etc.
 To provide the advocacy support to the most vulnerable migrants for protecting the
rights.
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These objectives will be kept in mind while researching various literature sources which can help
in examining the effects of immigration on the UK economy. Immigration is basically the
movement of the people to the destination country in which they do not have the citizenship for
settling as the permanent residents. Generally, migration benefits both the sending as well as
receiving countries which means the country from which the people migrate and the country to
which they migrate, both will benefitted economically greatly. The research will be based on the
immigration only so the research question is: “What are the impacts of immigration on the
economy of UK”?
Description of Literature and Data
The data which is related to the impacts on immigration on the UK economy is taken
from various secondary sources. Various databases are used which are proved to be the excellent
way for finding the conference papers, journal articles, various types of publications and theses.
Databases are considered as the most important research tools as they helps in finding about
most of the subject areas whether science, medical, humanities etc. There are various different
types of databases which covers different subject areas so it is the decision of the researcher to
choose the relevant database which can help in gaining in-depth insights about the specific topics
regarding specific country. The literature and the data used include the Foreign Affairs Manual,
the publications by the Association of American Immigration Lawyers, various case laws
regarding the immigration, Immigration practice manual and many more (Immigration Law
research, 2021). Various other secondary sources were used for the same topic which includes
the Immigration Trial handbook, scholarly articles, TRAC reports etc. The most important
database which was used in the literature and data is the Google scholar which is basically a
search engine which gives a great starting to the research. It helped in focussing about the
various papers, books and journals written and published by well known authors and publishers
respectively. CORE was also used which is basically an open research aggregator whose
working is just like a search engine. It helps in providing the researches which have open access
and are published by the organisations across the world. The literature will also use the data from
BASE (Bielefeld Academic Search Engine) which provides open access to more than 6,000
sources which consists of 140 million documents (Research and Journal databases, 2017). This
was used in the literature because 60% of the documents had open access. The data base which is
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named as DOAJ (Directory of Open Access Journals) was also used in which more than 12,000
journals were available regarding many areas but the social science area was widely extended.
All these journals of DOAJ are accessible to everyone who searches for any topic. It also helped
in knowing about the concept of immigration in the countries and its benefits in all the aspects
such as social, political and especially economical. Besides all these, various authenticated sites
were used such as oxford economics, parliament UK, voxeu, migration observatory, migrant
action and many more. Various blogs also helped in gaining significant conclusions for the
literature and data collected by going through many different secondary sources which were
already collected and published by the researchers. The secondary data was thus obtained
regarding the impact of immigration on the UK economy.
Methodology
Literature review plays the most important role in researching about any topic or doing
any type of research. These help in knowing about what is written about the specific topic in the
various secondary resources like books and journals, articles, research papers, publications etc.
Literature review must be appropriately conducted so that it can help in representing the
powerful information sources for the researchers as well as the practitioners. The process which
was used to reach to the data sources and chosen literature consisted of various steps (Butkus and
et.al., 2018). Firstly, the objective of the research was made and accordingly the research
question was made which was the impact of the immigration to be highlighted on the economy
of UK. After formulation of the objectives and the research question, the extent literature was
gone through and searched which are related to the immigration in UK. The literature included
either the concepts related to immigration or the impacts it has on the country like UK especially
focused on the economical impacts which means the impacts on the economy of UK (Damstra
and et.al., 2019). After searching the data, inclusion criteria were decided such as only those
papers and publications were selected which were in English language as there was no time to
translate the data from other languages to English. Also, the books and the journals chosen must
be published not before 2015. The publications must be published and written by well known
authors and must be authenticated. Only those articles were chosen which were related to the
topic and can help in obtaining significant outcomes and must achieve the objectives of the
research. Only peer reviewed literature are included such as grey literature, technical reports,
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guidelines based on Web (Methods for literature reviews, 2016). Also, the studies done in
context of UK will only be considered. After deciding the inclusion criteria for the literature and
data to be included, the quality of the primary studies is assessed by using the component
approach. In this approach, the publications and the books which are depended on the outcomes
were excluded. This depends on assessing the individual domains which are related to the
conduct of the method of collecting the data related to specific topic. After assessing the quality
of the studies, data extraction is done in which relevant data is selected and the other is rejected
(Charles, 2021). The data which can help in answering the research question is contained and the
other data which is not considered much relevant is excluded. This is how, these steps helped in
arriving at the data sources and the literature.
Summary of Literature and Data
The country UK is experiencing a flow of net migrants especially in the economy in the
last two decades which impacts the wages, population, economic growth, productivity and the
tax revenue. This was observed that due to the immigration in the economy of UK there is an
increase in the labour force as most of the migrants belong to the working age. This helps in
increasing the economy’s potential output capacity (Portes, 2018).
Figure 1: Number of immigrants by age group
Source: Pettinger, 2019
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The immigration in the UK economy also helps in increasing the Real GDP and aggregate
demand also increases. Migrants will lead to increase in total spending in the economy. Also
there is increase in the labour’s demand which also causes greater spending in the economy. This
increases the real GDP.
Figure 2: UK GDP vs GDP per head
Source: Pettinger, 2019
This was also evaluated that immigration in UK impacted the specific sectors such as education,
work and many others. Among all the areas, the higher education was impacted the most as
majority of the immigrants come for formal studies (Jafari and Britz, 2020). The immigration
also leads to rapid increase in the population due to migration and on the other hand it led to
decrease in the living standards. There is a housing shortage due to increase in the population.
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Also in the cities of UK, this becomes very difficult to construct the roads due to the limited
space. This also increased the urban pollution and congestion thereby increasing in the real GDP
which must be measured against the problems which impacts the quality of life. The immigrants
also contribute by making a positive fiscal contribution even at the times when UK was facing
financial crisis and budget deficits (Gudgin and et.al., 2018).
Figure 3: Contribution of immigrants to UK economy
Source: Pettinger, 2019
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The qualifications and skills of immigrants also impact the unemployment such that if the skills
in the immigrants are low there are more chances that they can experience the structural
unemployment. This is why many immigrants were forced to do the manual work like driving
the buses for filling the job vacancies (Minford, 2019). Furthermore, the immigrants prefer to
work on short term contracts. So when there is a downturn, they are laid off.
Figure 4: Immigration causing unemployment
Source: Pettinger, 2019
Due to immigration, labour supply increases which may push down the wages. When migrants
are ready to accept the lower wages, then this holds true. But the net migration in UK also affects
the labour demand as there is high investment in the economy. This increases the labour supply
and also enhances the demand for labour. While some migrants also become ready to work in the
black market which means they accept the wage which is less than the equilibrium. This was also
observed that at 10% increase in the migration, there is a fall in the wages by 31% (Jaeger, Ruist
and Stuhler, 2018).
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Figure 5: Effect of immigration
Source: Pettinger, 2019
The immigration also increased the number of households in the country UK. The housing
supply was limited which put pressure on the house prices and the renting price in UK. Though
migrants contribute by growing the economy, but also there is an increase in the tax revenue for
financing the public infrastructure (Simionescu and et.al., 2017). Migrants are mostly considered
as the working-age people which are a benefit for the government as they can pay the VAT,
income tax but will not claim the benefits.
This is how, the immigration impact the economy of UK.
Evaluation of the relevance of literature sources
In order to evaluate the appropriateness of the sources of literature, CRAAP test can be
used which stands for Currency, Relevance, Authority, accuracy and purpose.
Currency: This describes the information’s timeliness. The information gathered was published
recently not before 2015. The information was also revised and updated. Also, the information
regarding the immigration in UK was current and all the links were functional (Das, Marjit and
Kar, 2020).
Relevance: This highlights the significance of the data for the needs. The information collected
was completely related to the topic and helped in answering the research question. The audience
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intended was the immigrants in UK and the information was at the appropriate level neither too
high nor too low. Many sources were searched before choosing the ones used and this can even
be used for research paper.
Authority: This details the source of information. The authors of the publications were well-
known and authorised. The URL keeps the information of the author confidential and does not
allow others to know. There are no credentials given by the author and also there is no contact
information of authors.
Accuracy: This examines the truthfulness, reliability and the correctness of the data. The
information came from various books, journals, research papers, articles which are already
published by well-known authors. The information is supported by evidence and is also
reviewed. The data collected cannot be seen in another source. The tone and the language of the
literature were not at all biased. There are no typographical or any other spelling errors.
Purpose: This mainly evaluates the reason for the existence of the information. The main
purpose was to evaluate the impact of the immigration on the economy of UK. The authors put
their views very clearly and the information was much a fact rather than opinion. There are mo
biases included in it.
Reflection
Doing the literature review was a good experience for me as it helped in broadening my
mind regarding the topic which was immigration and its impact on the UK economy. It helped
me to know about various databases which can be used to search the information regarding
specific topics related to the area of study. The main thing which I felt is that the sources chosen
for collecting the data must be authenticated and must be copyright protected so that information
cannot be found anywhere except the original place. The good things were that I searched for
variety of sources which helped me in critically analysing the data. However, I wasted a lot of
time in searching about the topic instead of targeting the scope which was UK. In my future
works, I will try to focus more on the complete topic rather than understanding the concept.
CONCLUSION
The above report focussed on the concept of immigration and its impact on the UK
economy. It shed light on various literature sources and databases like search engines. This
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helped in gaining deeper insights about the opinions and views of various authors and publishers
regarding the topic. CRAAP test was used to evaluate the sources used to collect the information.
Reflection was also done to analyse the experience of doing the literature review and the ways in
which it can be improved for the future studies.
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REFERENCES
Books and Journals
Butkus, M. and et.al., 2018. Society's attitudes towards impact of immigration: case of eu
countries.
Charles, S., 2021. On the long-run relationship between immigration and growth: empirical
evidence from European countries. International Review of Applied Economics, pp.1-
16.
Damstra, A. and et.al., 2019. The impact of immigration news on anti-immigrant party support:
unpacking agenda-setting and issue ownership effects over time. Journal of Elections,
Public Opinion and Parties, pp.1-22.
Das, G.G., Marjit, S. and Kar, M., 2020. The Impact of Immigration on Skills, Innovation and
Wages: Education Matters more than where People Come from. Journal of Policy
Modeling. 42(3). pp.557-582.
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.
Jaeger, D.A., Ruist, J. and Stuhler, J., 2018. Shift-share instruments and the impact of
immigration (No. w24285). National Bureau of Economic Research.
Jafari, Y. and Britz, W., 2020. Brexit: an economy-wide impact assessment on trade,
immigration, and foreign direct investment. Empirica. 47(1). pp.17-52.
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.
Simionescu, M. and et.al., 2017. The effects of European economic integration and the impact of
Brexit on the UK immigrants from the CEE countries. E+ M Ekonomie a Management.
Wadsworth, J., 2017. Immigration and the UK Economy. Paper EA039. The Centre for
Economic Performance at the London School of Economics and Political Science,
London.< http://cep. lse. ac. uk/pubs/download/ea039. pdf.
Online
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Immigration Law research, 2021. [ONLINE]. Available through :<
https://libguides.law.umn.edu/c.php?g=125774&p=823578>
Methods for literature reviews, 2016. .[ONLINE]. Available through :<
https://www.ncbi.nlm.nih.gov/books/NBK481583/>
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/#:~:text=Increased%20migration%2C%20will%20also%20affect,of
%20immigrants%20willing%20to%20work.>
Research and Journal databases, 2017. [ONLINE]. Available through :<
https://getproofed.com/writing-tips/10-free-research-journal-databases/>
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