- Applied Institute for Research in Economics
This article was first published on the LSE British Politics and Policy blog.
To understand the sharp polarisation on immigration issues, we need to look beyond economic indicators and consider the consequences of immigration for natives’ subjective well-being. Using data from a longitudinal study, Peter Howley finds that there are winners and losers in this regard. People who self-identify as English, as opposed to British, appear as a group much more likely to experience a decline in their subjective well-being when faced with inflows of migrants into their local area. One explanation is that people who identify with an English national identity are more likely to see ancestry as a key criterion for national belonging and are, thus, more likely to perceive migrants as belonging to an out-group.
Debates surrounding the control of borders feature prominently in the political sphere. Immigration fears, for example, dominated much of the Brexit debate. Fortunately, we know much about the economic impact of immigration. Consistently, studies have found that immigration has benign, if not zero, impacts on the wages of natives. Recent evidence also suggests that immigration has had a positive impact on UK productivity.
Migrants tend to complement, as opposed to compete against, existing workers.
Focusing specifically on the UK, an assessment by the Migration Advisory Committee consisting of a review of academic research, as well as its own analysis, concluded that immigration has had little impact on employment outcomes or the wages of natives, but may have had some small negative impacts for lower skilled workers and small positive ones for those with higher educational qualifications. One reason for this is that migrants tend to complement, as opposed to compete against, existing workers, by often doing the tasks others don’t want to do. An additional reason is that as migrants enter the labour market, they create jobs by using the wages they earn to support economic activity, helping the economy to expand.
The power of perceptions
The small number of studies internationally that do find negative wage effects show that these effects are small and generally only apparent for certain sub-groups of the population. You have to splice the data very thinly and look at very specific groups to observe any negative impacts and, even then, the overall effect tends to be positive. One thing that everyone can agree on, irrespective of attitudes towards immigration, is that in comparison to other tools at a government’s disposal (such as taxes, minimum wage legislation, regulations, investments in education and infrastructure and public sector pay) restricting immigration is an ineffective (and possibly harmful) tool for increasing people’s wages.
Another common immigration concern is that migrants will be a drain on public resources. In reality, the opposite is true as migrants are on the whole substantive net contributors to the public purse. This is because, on average, they are more likely to be at work, are often educated elsewhere and are less likely to access social services. Of course, one can easily understand negative sentiments here. Due to, amongst other things, the accession of new member states to the EU, the UK witnessed large increases in migrant flows at the same time as public services were cut due to austerity. It is easy in these circumstances to mistakenly attribute increased waiting times for an NHS appointment to increasing numbers of migrants.
Focusing on economic well-being may, therefore, only tell us part of the story when it comes to understanding the sharp polarisation on immigration issues. In new research, my colleague and I looked at the relationship between inflows of migrants into local areas and the self-reported (subjective) well-being of the existing residents in those areas. We did this by matching the UK Household Longitudinal Study, a large annual household survey of approximately 50,000 respondents, that records individuals’ well-being, with data from the office for national statistics capturing the numbers of migrants living across local authority areas. The specific well-being indicators that we used were self-reported life satisfaction and what is known as the General Health Questionnaire. The former simply asks individuals to rate, on a seven-point scale, how satisfied or dissatisfied they are with their life overall. The latter is a widely used 12-item scale to measure a variety of components of mental well-being, such as anxiety, social dysfunction, and general happiness.
Using this data, we were able to track how the subjective well-being of various sub-groups in the population changed over time in response to inflows of migrants into their local area. We felt that an examination of subjective, as opposed to economic, indicators of well-being could help us better understand the sharp polarisation on immigration issues. Our intuition was that if migrants are perceived as a threat, irrespective of whether this is true or not, immigration could negatively impact some people’s subjective well-being.
Explaining the identity divide
When we look at the UK population, we find that immigration may have some adverse consequences for subjective well-being, but these overall effects are small. What is of most interest is that this effect in the general population masks a lot of differences across population sub-groups, based on how people self-identify in terms of their national identity. To illustrate, when comparing the two largest national identity sub-groups in the UK, namely those who feel principally English versus those who feel principally British, we find that assessments of the effect of immigration on their self-reported life satisfaction are diametrically opposed. People who feel English appear to undergo a significant and substantive loss in their life satisfaction when faced with significant inflows of migrants into their local area, but for those who identify as British, the opposite is true. We observed similar (albeit less stark) differences between our English and British identity sub-groups when looking at the General Health Questionnaire.
People who feel English appear to undergo a substantive loss in their life satisfaction when faced with significant inflows of migrants into their local area, but for those who identify as British, the opposite is true.
The question then is, what explains these differences? Two theoretical frameworks, namely social identity theory and identity economics, used in social psychology and economics, respectively, offer important insights here. The basic idea behind social identity theory is that we are all predisposed to divide ourselves into in- and out-groups, and people belonging to the in-group are less likely to trust out-group members. We know from survey research that people who identify as English are more likely to see ancestry as a key criterion for national belonging and are therefore more likely than their British-identity counterparts to perceive migrants as belonging to an out-group.
Identity economics would suggest that migrants may have negative consequences for what economists refer to as identity utility, because they may be less likely to conform to the normative behavioural ideals associated with being English—given, amongst other things, differences in culture, religion and language.
We are not saying that one national identity is better or worse than the other (and of course some people will feel strong attachments to both) or even that everyone who feels English as opposed to British will feel worse off as a result of immigration. Rather, we are saying that if we look at people who feel English as opposed to British, they are, as a group, likely to feel an overall loss in their subjective well-being when faced with inflows of migrants into their local area. On the other hand, people who identify as British are more likely to witness an increase in their well-being. In these circumstances, the sharp polarisation on immigration issues is not just understandable but perhaps inevitable, as demographic change has sharply diverging subjective well-being impacts for different cohorts of the population.
Acknowledgements: This work was supported by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily those of the Foundation.
The above draws on Identity, immigration, and subjective well-being: why are natives so sharply divided on immigration issues?, Oxford Economic Papers.
The views expressed in this article are those of the author and may not reflect the views of Leeds University Business School or the University of Leeds.