Immigration does not cause unemployment

There is no link between rising immigration and rising unemployment, independent economists have found – contradicting persistent claims from anti-immigration activists and politicians that an influx of foreign nationals into the UK in recent years has led to more British-born workers on the dole.

The respected National Institute of Economic and Social Research found that there was "no association" between higher immigration and joblessness – even at times of recession or low growth of the sort that Britain is experiencing at the moment.

In fact, the Institute's researchers suggested that the opposite might be the case and that immigration acts as an economic stimulus, pushing total employment levels higher and dole claimant numbers lower than they would otherwise have been.

"Perhaps surprisingly," their economists said, "the interaction between migrant inflows and GDP emerges as positive, indicating that during periods of lower growth, migrant inflows are associated with ... slower [dole] claimant growth than would otherwise have occurred." The researchers did concede that the stimulating effects of migration on the overall labour market at a time of recession are likely to be small.

The anti-immigration pressure group MigrationWatch claimed yesterday that rising immigration from Eastern and Central Europe since European Union enlargement in 2004 had contributed to a surge in youth unemployment in Britain, which is now above 1 million. MigrationWatch released its own report, saying: "Youth unemployment in the UK increased by almost 450,000 in the period from 2004 Q1 to 2011 Q3. Over the same period, numbers of workers from the A8 countries grew by 600,000.

"Correlation is not, of course, proof of causation but, given the positive employability characteristics and relative youth of migrants from these countries, it is implausible and counter-intuitive to conclude ... that A8 migration has had virtually no impact on UK youth unemployment."

However, critics of MigrationWatch pointed out that youth unemployment started rising before 2004, the point when Polish and other former Soviet bloc nationals were freely permitted to enter the UK to work.

And Jonathan Portes, the director of the National Institute of Economic and Social Research and former chief economist at the Cabinet Office, also argues today that most of the rise in youth unemployment took place in 2008 and 2009, a period during which the number of Eastern European workers entering Britain to seek employment dipped. Government ministers have implied a link between immigration and joblessness. "Controlling immigration is critical or we will risk losing another generation to dependency and hopelessness," said Iain Duncan Smith, the Secretary of State for Work and Pensions, in a speech last July.

The Coalition has imposed a cap on immigration from outside the European Union and has pledged to reduce net migration to "the tens of thousands" a year by the end of this parliament in 2015.

The Office for Budget Responsibility, however, has cast doubt on whether the Government will succeed in meeting this goal, with the Coalition's fiscal watchdog estimating that average annual migration until 2016 will be 140,000.

Net migration hit a record high of 252,000 in 2010, although this was mainly due to a sharp fall in the number of Britons leaving the country rather than an increase in immigration.

To analyse the impact of migration on the labour market, the Institute's researchers compared the overseas nationals who were allocated national insurance numbers in an area with the number of people claiming the dole locally.

Case studies: immigrant success stories

"I came with nothing. Now I employ four people" - Datsa Gaile, 39, Northampton

In seven years I have gone from living in a single room, scouring the country for a job – to editing my own newspaper and employing people. When I came to live in the UK in 2006, a friend and I arranged accommodation and work with an agency in Latvia. But when we arrived in London there was nothing. We thought we would have to stay on the streets. I realised I had to do things for myself. I made a CV and got a job. Then I brought my children to the UK. In 2009 I began studying for a BA in business studies at Northampton. At university, I began a paper for the Latvian community. We print 10,000 copies per month.

"I don't believe I'm taking someone else's job" - Agata Wasziewicz-Schmidt Dos Santos, 29, interpreter, Newquay

My husband and I came here in 2008 from Poland. First I worked at Starbucks because I couldn't get work in languages, even though I speak Polish, Portuguese and English. As soon as I changed my email address to a less foreign name, I started getting invited to interviews. I don't believe I'm taking someone else's job, because there aren't many people who speak Polish and Portuguese. I give back to the community, by working in schools and hospitals. My husband owns a martial arts business. He trains other instructors – one of them is an unemployed Brit.