The Economic Characteristics of Immigrants and Their Impact on Supply

13 Pages Posted: 12 Dec 2006

Abstract

Immigration to the United Kingdom has risen rapidly over the past decade, driven most recently by flows from the ten EU Accession countries. Monetary policy makers are interested in the impact of immigration on the macroeconomy and inflation. An increase in the number of immigrants, other things being equal, would raise the supply potential of the economy. But the extent to which potential supply increases will depend on the economic characteristics of immigrants. This article investigates the characteristics of immigrants, particularly new immigrants - those who have entered the United Kingdom in the past two years. It appears that new immigrants are more educated than both UK-born workers and previous immigrant waves, but are much more likely to be working in low-skilled occupations. The increasing share of new immigrants in low-skill, low-paid jobs seems to have led to the emergence of a gap between the wages of new immigrants and UK-born workers. The implications of these findings for overall productivity and the supply side of the economy are complex.

Suggested Citation

Saleheen, Jumana and Shadforth, Chris, The Economic Characteristics of Immigrants and Their Impact on Supply. Bank of England Quarterly Bulletin, Winter 2006, Available at SSRN: https://ssrn.com/abstract=950924

Jumana Saleheen (Contact Author)

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Chris Shadforth

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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