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					Who Comes to London and How do
 They Fit in the Labour Market ?

                 Ian Gordon
       LSE London research centre,
       London School of Economics

            LSE London HEIF5 Roundtable:
       ‘Migration and the transformation of London’
                    5th October 2012
•   London Migration over past 25 years
•   Significance of Irregulars
•   PBS – Highly Skilled Tier 2 Entries
•   Impacts of Migration on Bottom of LM
1. London Migration 1987-2012
 • Via 2 upsurges, in late 1980s and late 1990s overseas migration
   has turned around trends in London’s adult population
      – Net inflow peaking at c. 100k around 2000, but still c. 40k
 • Overseas born population risen from 1.1mn to 2.8mn
      –   Share of pop doubled (18% to 36%) – partly due to 50% displacement of others
 •   And cosmopolitanism grown enormously:
      –   56 national communities with 10 K plus residents – more non-anglophone/ex-colonies
      –   as many Poles as Irish or Indian, and large West European groups too
 •   Large inflows from both poor and rich countries – but former stay more
 •   London gains disproportionately
      –   except perhaps from A8s – with just 15-20% share
             • Possibly effect of agency activity in steering to e.g. food processing centres
             • Not salient in London – where more independents and self-employed (esp. constr.)
      –   cf. 80% + of asylum seekers – before dispersal policy introduced c. 2000
      –   around 30% for other groups
 •   Migrants are young and with as much education as young Londoners
Net Migration 1981-2010
150        Net International

100        Net Migration with
           Rest of UK





    1980    1985      1990      1995   2000   2005   2010
2. The Role of Irregulars
• Irregulars = illegal migrants + over-stayers + ‘failed’
  asylum seekers
   – on our (2009) estimation preponderantly the last of these:
        • the (substantial) remnant of the (poorly managed) influx around 2000
• We suggested UK total of c. 600k in 2007 with c.70% in London
   – building on Home Office (Woodbridge) estimates for 2001
   – and allowing for c 170k regularised cases 2003-7
• UKBA’s case resolution / legacy programme (2006-11) should
  have eliminated this group (except for recent arrivals)
   – either by deportation or regularisation – mostly latter (c. 70%) in practice
   – but half the expected cases (files) were determined to be mistakes
        • i.e. already gone, legal or dead ! Though evidence on this is quite unclear

• Quite unclear where this leaves:
   – our estimate of who, and how many, irregulars there were
   – number who are still ‘irregularly present’ (beyond the admitted 124 k?)
Why Would This Matter ?
• Until quite recently regime accommodated a wide spectrum of
  effective degrees of regularisation among the formally ‘irregular’
    – cf our estimate that 50% of adults in work and irregularity responsible for
      only c. 6% in employment rates (though 30% in pay)
    – and that far from all being in the ‘black’ they probably paid 50% of due tax

• Under a more tightly policed regime, this is increasingly ceasing
  to be the case

• So, it seems that we need to know a lot more about how many
  people are in this situation (beyond the hope of regularisation
  from which most of the visible benefitted) – and where they are
    – as well as about how they got lost, and how far UKBA are to be held
      responsible for this
3. Highly Skilled (Tier 2) migrants
 under the Points Based System
 • Includes both:
      – (quota-ed) general migrants and
      – (unquota-ed) ‘intra-company transfers’ (for 1 year or 2+3)
 • In total could involve 50k visas in 2011/12
      –   roughly 60% ICT, 40% general (almost all under £150k p.a.)
      –   but many (40%?) for periods below 1 year (i.e. not ‘migrants’)
      –   Say 30k primary migrants + 15k dependants
      –   Maybe 36k left after 5 years and 27k after 10 ?
 • Main origins:       India (55% overall, 75% among ICT), US (13%), Australia,
     Canada, South Africa, China, Pakistan, Phillipines (2-3% each)
 •   Strong GSE esp ‘City’ concentration because of concentration of IT and financial
     services – the key drivers of demand (+ some international HQs)
      –   some bias also to bigger centres – but not specifically London
Concentration of Tier 2 in Greater South East
Notably in City / Canary Wharf
4. Impacts of Migration at the Bottom
  End of the London Labour Market
   • The research consensus is that in-migration does not
     lower average earnings or employment rates
      – But that it might have negative effects at the bottom end
          • much among earlier migrants
   • One mechanism for this would be the crowding of new
     arrivals from poor countries into the bottom tier of jobs
      – Comparing London with other regions, we have evidence that:
          • The boom of such migration from 1995-2005 lowered wages in the bottom quintile
            by c. 15 %
          • That this is turn stimulated a growth in jobs in this segment – possibly by shifting
            demand for locally traded services between London and its regional neighbours
          • And (to be confirmed) that lowering expected wages for those only likely to get
            such jobs depressed participation rates (with more ‘not wanting’ a job)

   • A regressive and controversial aspect of the process
      –   though issue may be the under-employment of able new migrants
London Migrant Jobs by Type and Quintile
    Migrant Origin        Years in   Bottom     2nd        3rd        4th        Top
                          the UK     quintile   quintile   quintile   quintile   quintile

    Non-Migrant              ..       11.3%      16.0%      17.4%      24.0%      31.3%

    High Wage countries     0-3       13.5%      11.6%      10.2%      24.3%      40.5%
    HWC                     >3        9.5%       12.6%      9.8%       24.3%      43.8%

    Low Wage countries      0-3       40.5%      19.7%      9.0%        9.1%      21.7%

    LWC                     >3        23.9%      21.3%      17.7%      17.3%      19.8%
Relation between Years in UK and Working in Bottom Quintile Jobs
                for Migrants from Poor Countries


           Proportion in Bottom Quintile






                                                  0.00   10.00        20.00        30.00   40.00
                                                                 Years in the UK
              Bottom Quintile Real Earnings


                      1970   1980            1990        2000     2010

                                    London          Rest of GSE
                                    S West          W Mids
                                    E Mids          Yorks and H
                                    N West          N East
                                    Wales           Scotland
In-migration from Overseas                                  (per cap)


            1975   1980   1985    1990          1995    2000     2005   2010

                                 LONDON                SE & E
                                 SWest                 WMids
                                 EMids                 Yorks&H
                                 NWest                 North
                                 Wales                 Scot
Bottom Quintile Share of Regional


          1975   1980   1985    1990          1995    2000     2005   2010

                               LONDON                SE & E
                               SWest                 WMids
                               EMids                 Yorks&H
                               NWest                 North
                               Wales                 Scot
Trends in London Worklessness
 Relative to RGSE 1996-2009
• International migration has been key to London
  population growth and transformation over last 25
• Character at least of this has been shifting as policy
  starts to get a grip
• Needs much more open discussion
• Substantial uncertainties about key aspects
• A starting point for work and discussion in the series
Gordon, I, Travers, T and Whitehead, C (2007) The Impact of Recent
Immigration on the London Economy. City of London 2007,

Gordon, I; Scanlon, K; Travers, T and Whitehead, C. (2009) Economic
impact on the London and UK Economy of an earned regularisation of
irregular migrants to the UK . GLA .

Whitehead, C; Edge, A.; Gordon, I.; and Scanlon, K. (2012) The impact of
migration on access to housing and the housing market. Migration Advisory
Committee., UKBA/Home Office, January.

Gordon, I and Kaplanis, I. (2012) ‘Accounting for Big City Growth in Low
Paid Occupations: Immigration and/or Service Class Consumption’, Spatial
Economics Research Centre FP106, April

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