U.K. Immigrant Worker Population May Fall Less Than Feared
(Bloomberg) -- The U.K. may have lost fewer immigrants during the coronavirus crisis than previously feared, according to government data.
The pandemic has made it hard to count people entering and leaving the U.K., and some economists had calculated that more than 1 million foreign-born workers may have left the country last year. That was based on responses to a survey regularly carried out by the Office for National Statistics.
But in an article published Tuesday, the ONS said that real-time tax data suggest that the reduction may have been overstated. While the Labour Force Survey indicates the number of non-U.K. nationals in employment in the U.K. was 15% lower in the fourth quarter of 2020 than a year earlier, real-time information puts the decline at just 4%.
That’s a drop of less than 180,000, compared with a decline of over 560,000 in the LFS survey. A criticism of the LFS survey is that it under-records the number of foreign-born workers because migrants are less likely to repond to a telephone survey than face-to-face questions.
For policy makers, knowing the size and composition of the population is important for the planning and allocation of publicly funded resources. There are also big implications for potential economic growth and the public finances. A sharp fall in migration would mean less tax revenue to pay down the huge debts built up to help the country through the pandemic.
The payrolls data found that the number of European Union nationals employed in the U.K. fell by more than 7% in the fourth quarter from a year earlier, while there was little change in the number of workers from other parts of the world.
“To the degree that these differentials are indicators of population change, this might suggest a shift in the non-U.K. population from EU national to non-EU national people,” the ONS said.
What is unclear is whether those who lost jobs decided to stay in the country. For EU citizens who left, Brexit has made the route back harder unless they already had settled status.
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