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1.7.2006 | Von:
Michael Heinen and Anna Pegels

The Results Two Years after Enlargement: Preliminary Results

According to a report issued by the European Commission in February 2006 on the first phase of the transitional arrangements, the United Kingdom, Ireland and Sweden found that the free movement of workers from the EU8 had had a positive effect on their economies in general. [1]
Polnisches Geschäft im englischen Derby.Polish shop in Derby, England. (© picture alliance / empics )

Given the low number of EU8 migrants that have entered Sweden since May 2004 [2], the following analysis will concentrate on the United Kingdom and, to a more limited extent, Ireland.

How Many Migrant Workers Have Arrived From the EU8?

Available data in the United Kingdom and Ireland make it difficult to determine exactly how many migrant workers have arrived in those countries from the EU8 since May 2004. In order to monitor the employment activities of migrant workers from the EU8, the United Kingdom introduced the Worker Registration Scheme (WRS), with which workers from the EU8 are required to register within 30 days of entering employment. Between May 2004 and December 2005, 344,635 EU8 workers registered with the WRS. However, or several reasons, this figure cannot be taken as representative of the number of EU8 migrants entering the UK following accession. First, workers are required to register for each new job, which means that migrants who change jobs can be recorded multiple times in the WRS. Second, migrants are not required to deregister if they leave their job or the country. Third, once an EU8 worker has been legally employed for a period of 12 months, they are no longer required to register with the WRS. Finally, according to one UK report, 26% of workers registered with the WRS by December 2004 had reported being in the UK prior to accession, and a further 12% did not give details on their date of arrival [3]. This means that many people recorded in the WRS were living and/or working in the UK prior to accession and registered a change of job after 1 May 2004. And so, the total number of WRS registrations most likely overestimates the inflow of EU8 labour migrants following accession.

The number of EU8 migrants registered in the United Kingdom amounted to only 0.4% of the total working age population in the periods from May 2004 to September 2005. Contrary to predictions, the UK did not experience a sudden and uncontrollable influx of migrant labour from the new EU member states.

In Ireland, the number of Personal Public Service (PPS) Numbers issued has been used as an indicator of the numbers of labour migrants that have arrived from the EU8 following accession. Between May 2004 and November 2005, 160,853 PPS numbers were issued to people from the EU8. As with the WRS in the UK, however, these figures overestimate the number of actual labour migrants, as the numbers are also issued to accompanying family members for social security and health care purposes. Additionally, it is possible that a number of these migrants were present in Ireland prior to accession. From May to December 2004 the number of PPS numbers issued amounted to 1.9% of the working age population; this percentage rose to 3.8% from January to September 2005. Although Ireland has received the highest number of EU8 migrants proportional to its working age population since May 2004, the large number has to be seen as part of the significant rise in immigration that has taken place there since the mid-1990s [4], and not only as a consequence of the country´s application of the free movement of workers principle.

What Type of Labour Migrants Have Arrived From the EU8?

In terms of demographic characteristics, data show that labour migrants from the EU8 states are typically young and single. In the United Kingdom, 83% of the 344,635 workers who registered with the WRS between May 2004 and December 2005 were aged 18 to 34, and only 6% were accompanied by their families. The majority came from Poland, Lithuania and Estonia.

The migrants hold a mixture of low-, moderate- and high-level qualifications. Notably, the United Kingdom and Ireland experienced an influx of dentists, nurses, doctors and other professionals. The report prepared by the European Commission on the first phase of the transitional arrangements examined the skill levels of EU8 nationals (plus those from Cyprus and Malta), in reference to the EU15 as a whole. It found that 57% of EU8 nationals in the EU15 in 2005 held medium-level qualifications [5], a further 21% were considered low-skilled and 22% were considered highly-skilled. Therefore, according to the report, 79% of labour migrants from the EU8 states (plus Cyprus and Malta) belong to either the moderately- or highly- skilled category.

What Effect Have EU8 Labour Migrants Had on the Economy?

According to various analysts [6] and the European Commission, EU8 labour migrants have had a positive economic impact in the United Kingdom and Ireland in general. Due to the greater availability of data on the effect of these migrants on the United Kingdom's economy, this section will concentrate on developments in that country. Of particular interest here is the effect this migration has had on employment rates and wages.

With regard to employment rates, there was a substantial increase in the employment level of EU8 workers following the introduction of free movement, and it has even surpassed the employment level of UK-born workers. The most significant aspect of these findings, however, is that this increase did not take place to the detriment of UK-born workers, whose employment rate has remained constant. Theoretically, this could be the result of EU8 migrants finding employment in sectors – such as agriculture, hospitality and administration – that have been experiencing labour shortages. It could also be the result of the types of qualifications and skills the EU8 migrants have brought with them (see above). According to the European Commission's report, the medium-level qualifications possessed by the majority of EU8 migrants are precisely the level of qualification most often lacking in EU15 countries, therefore; the new arrivals would tend to complement the UK-born workforce rather than compete for the same jobs.

EU8 Migrant and UK-Born Employment Rates 2000-2005EU8 Migrant and UK-Born Employment Rates 2000-2005 Lizenz: cc by-nc-nd/2.0/de (bpb)
Another explanation for the trend in employment rates could be the legalisation of formerly unofficial employment by EU8 migrants present in the United Kingdom before accession. Some migrants residing and working in the country prior to the enlargement may have taken advantage of their new status to register their employment activities with the authorities.

Average Earnings Index in the Agriculture and Fishing Industry and the Whole EconomyAverage Earnings Index in the Agriculture and Fishing Industry and the Whole Economy Lizenz: cc by-nc-nd/2.0/de (bpb)
In the United Kingdom, average earnings have risen steadily, which runs contrary to fears that an influx of workers from the EU8 countries would lower wages due to increased competition. This is even observed in the agricultural sector, where a large number of these workers found employment. In theory, this could be due to the fact that young labour migrants in general – as the majority of EU8 migrants are – tend to be highly motivated. This may lead to higher productivity and, in turn, to higher wages. The rising wages may also be the result of increasing consumer demand from the migrant population itself.

Beyond these positive developments in employment levels and wages, the British government placed the net economic gain due to labour migration from the EU8 countries in the first eleven months after accession at approximately 500 million pounds.

Fußnoten

1.
See European Commission (2006).
2.
The data contained in the European Commission's report places the number of EU-10 (EU8 plus Cyprus and Malta) migrants that entered Sweden from May to December 2004 at 3,514, or 0.1% of the working age population (WAP) aged 15-64. See European Commission (2006).
3.
See Portes and French (2005).
4.
The number of work permits issued to non-Irish migrant workers rose from less than 6,000 in 1999 to approximately 50,000 in 2003. For an overview of recent immigration to Ireland see Ruhs (2004).
5.
According to the report, medium-level qualifications "include upper secondary education and specialised vocational training." See European Commission (2006).
6.
See for example Home Office (2005), Portes and French (2005) and Traser (2005).

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