Today is B-Day, when British voters decide whether to leave or stay in the European Union. For anyone fond of buzzwords the choice is simple: Brexit or Bremain? Yet the data feeding into the referendum are more complex and, as shown time and again, woefully open to manipulation.
One of the main arguments revolves around migration, specifically whether the economic impacts of migration benefit or harm the UK in terms of wages, employment and public services. Those pushing for Brexit say that EU labour migration has caused British workers to lose their jobs, earn lower wages, and put more pressure on the welfare state. Their view is fundamentally at odds with the European project, which says that free markets – including the free movement of workers – lead in the long run to a more efficient allocation of resources and hence to greater welfare overall.
Which side is right? Or rather, which side can muster enough substantial research to make the stronger case? The empirical evidence globally, including for the UK, shows that in spite of all the fearmongering in the media, labour migration does not harm jobs or earnings. If anything, it leads to greater economic equality. How these choices affect the public coffers depends on effective selection policies, but freely mobile European labour migration typically leads to net benefits. Certainly, as with all market processes, mobility leads to economic adjustments and, in this context, educated workers perform better.
On average, recent immigrants to the UK are younger and better educated than their British counterparts, and many are in full-time education. In relative terms, they are outliers: more likely to be found among very high-skilled occupations but also in very low-skilled occupations. And in an ageing Europe, students are the best solution to satisfy the long-term demand for skilled workers. So the outcry over ‘British jobs for the British’ is short-sighted. On the contrary, immigrants are needed to create jobs and welfare for UK nationals.
So why this huge gap between public perception and reality, as judged by scientists? The media like to promote dramas and many policymakers prefer to play with emotions to improve their election chances instead of communicating insights about the realities. Hence, research shows that it is not so much nationalism and its rise, but unsubstantiated concerns about the socio-economic consequences that drive negative attitudes against immigrants among voters. Essentially, ‘natives’ view immigration more favourably if immigrants are arriving selected according to the needs of the labour markets.
So what will happen if the UK votes for Brexit? First, the skilled Europeans now working in the UK will slowly leave and find jobs elsewhere. In other words, they will contribute to other economies. Second, their loss will cause actual economic harm to the UK, as noted by all sides, and will require a rise in taxes to balance the UK budget.
The bigger picture
But of course, these arguments simply scratch the surface. People write and edit entire volumes on these debates, including myself in the book below. This volume extends and deepens our knowledge about cross-border mobility and its role in an enlarged EU. Its main purpose is to enlighten the growing and still rather uninformed debate about the role of post-enlargement migration for economic adjustment in the crisis-stricken labour markets of both the Eurozone and the EU as a whole. One success story is the EU’s eastward enlargement, which has brought Europe higher welfare and better adjustments to economic shocks. The UK has also reaped the economic advantages of this process, as much evidence has shown.
The book addresses the political economy aspects of post-enlargement migration, including its broader political contexts, redistributive impacts, but also the nationalisation of the enlargement agenda. It also covers the experience of receiving and sending countries with post-enlargement migration and its role during the current crisis. It shows whether and how post-enlargement mobility has enabled the EU to absorb asymmetric economic shocks, how it has affected the European welfare systems, and whether it has contributed to the sustainability of the Eurozone. The authors also evaluate ‘brain circulation’ and put forward a mobility policy agenda for an enlarged EU.
Brexit or Bremain? In both cases the insights of the book are needed to better understand the policy options and either to reduce damage or further increase welfare among European member states.
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