The NIESR blog is a forum for Institute research staff to provide an informed, independent view on current economic issues and recent NIESR research. The views expressed here are those of the authors, and are not necessarily those of the Institute.
“We can control immigration and have a system which welcomes people to the UK based on the skills they have, not the passports they hold”. This was one of the key points in the Vote Leave campaign literature almost three years ago. Two years later, the 2018 Immigration White Paper adopted this message. The foreword written by the Prime Minister reads: “This will be a system where it is workers’ skills that matter, not which country they come from”.
It is workers’ skills that matter, but some skills matter more than others. High-skilled, high-earning migrants are prioritised under the new system. But what does high-skilled mean?
Conventional wisdom has it that that British people are strongly against low-skilled migration, but much more accepting, and even supportive, of high-skilled migration. This preference continues to influence policymaking, as the UK government seeks to introduce a new skill-based immigration system post-Brexit, aimed at reducing the number of low-skilled migrants.
A new report by NIESR and Impetus on young people Not In Education, Employment and Training (NEET) reveals that young people with a disadvantaged family background are 50% more likely to be NEET than better off peers irrespective of their education outcome.
We know university degrees affect future earnings power, but could higher vocational education actually make your kids better off? New evidence shows it could.
A few weeks ago the BBC reported that young people are turning down the opportunity to study for a foreign language GCSE: its own analysis found drops of between 30% and 50% since 2013 in the numbers taking GCSE language courses in some areas of England. Employers voiced their concern that the future labour force will be ill-equipped for a post-Brexit Britain, and to forge trade deals across the world.
Earlier this week, in the midst of the unfolding political crisis over Brexit, I was invited to discuss evidence on the impact on service trade at a session of the House of Commons International Trade Committee, alongside other researchers and academics, trade policy experts and a number of business representatives.
The hospitality sector is one of the highest employers of EU migrants with the most recent Employer Skills survey finding a third of hotels and restaurants employ at least one person from the EU and they represent 19% of the workforce. So it is no surprise to find that hotels, restaurants, coffee shops and bars are among the businesses most affected by any reduction of migration ushered in by Brexit.
As images of unrest in the streets of Paris and other French cities continue to flood in the European media, the data on France contained in our latest global forecast, published last week, painted a subtler but still concerning outlook for the French economy.
Over most of the period since World War II, UK productivity performance has been disappointing. Two episodes stand out, namely, the acute phase of relative economic decline during the 1950s through the 1970s and the ‘productivity puzzle’, that is the flatlining of productivity since the onset of the financial crisis in 2008.
In July 2015 the UK government announced the introduction of a new statutory ‘National Living Wage’ (NLW) that would apply to those aged 25 and over from April 2016. At a rate of £7.20, this represented a significant increase of 7.5% over the existing National Minimum Wage rate (and a 10.8% increase on the rate prevailing a year previously - in April 2015).
A comparison of 16 to 18-year-old students following A-Level or vocational and technical routes shows us that Non-A-level students need more options for progression
With all eyes on the current Brexit mess, we have been devoting less attention to the economic and social divisions that led to the Referendum in the first place. While some academics have described this as ‘the revenge of places that don’t matter’, it is a rather unfortunate situation, as disparities are likely to be exacerbated by Brexit.
Maths skills are not only of significance in the labour market, they are important for all of us in our everyday lives. Yet around a third of young people do not obtain a standard pass in GCSE maths (provisional figures from the Department of Education show 65 per cent of pupils achieved grades 9-4 in 2018). While improving maths skills is a focus for all phases of the education system, recent years have seen growing recognition of the role primary school maths education can play.
The Immigration White Paper is finally with us, like the awkward last minute Christmas present from a distant relative rewrapped several times to make it look more appealing. The Paper is supposed to address public concerns and give businesses and services clarity about how they will be able to recruit for the skills they need. But what’s beneath the not-too-pristine wrapping and is it what we need or indeed even what we say we want?
Earnings growth continues to surprise to the upside. According to new ONS statistics published earlier this week, UK average weekly earnings (AWE) expanded by 3.3 per cent (excl. bonus) and 3.4 per cent (incl. bonus) in the three months to October compared to the year before.
Building on the official data, we think that earnings growth still has room to pick up further. Our econometric models suggest that UK earnings will continue to accelerate going into the New Year.
As Theresa May faces a show-down in Parliament and tours the UK in a ‘charm offensive’, she is expected to turn to immigration to gain support for her deal. The Immigration White Paper may finally be published next week to assist this refocus. But the latest migration statistics indicate serious challenges are ahead.
Those of us with long memories will have seen elements of previous political and economic crises in the last week’s events. There was a whiff of the resignation of Mrs Thatcher in November 1990, the end of Sterling’s membership of the European Exchange Rate Mechanism in September 1992 and not a little of the financial crisis, which was triggered in August 2007. And yet while the former events bookended a recession and the latter led to one, so far our political crisis has not led to an extreme economic downturn. I think this is because the most likely outcome for an end game in the exit process is some form of agreement that leaves near frictionless trade in place with the EU for some years to come. Such an outcome, despite the political opinions of it, will limit the transitional costs of an exit from the EU.
UK labour productivity is significantly lower than that of many other similarly advanced economies and has been so for decades, with negative implications for UK living standards. To make matters worse, during the last ten years labour productivity growth has stalled in most industrialised countries, and particularly in the UK. This has led to a renewed policy focus on productivity growth, as evidenced by successive government productivity plans and efforts to re-invigorate industrial strategy.
Brexit is adding pressure to the already stretched health and social care workforce in the UK. One of the reasons is that the UK is seen as a less attractive place for current and prospective EU migrants. This is not just a perception. A new report by NIESR prepared for the Cavendish Coalition, shows that the Brexit Referendum has triggered an immediate reaction from EU healthcare professionals in terms of working in the UK: There are more leavers, and less joiners.