Adam Smith Institute

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Prices not points: A post-Brexit immigration solution

  • As the UK prepares to leave the European Union in 2019, the government must create a new policy for immigrants from EU-member nations. It should also rethink its policies regarding non-EU immigrants as well. 
     
  • In recent years, UK immigration policy toward non-EU migrants has prioritised highly skilled workers. Free-movement migrants from within the EU have generally held low- or semi-skilled jobs and had strong labour force attachment. 
     
  • UK immigrants have higher education levels than natives, on average, and while the largest economic gains typically come from highly skilled immigrants, less-skilled immigrant workers make economic contributions as well. 
     
  • The empirical evidence indicates that immigration has had a negligible overall effect on natives’ employment, unemployment, and wages in the UK. However, a few studies conclude that the labour market prospects of less-skilled native-born workers have been harmed by immigration.
     
  • Reducing immigrant inflows, particularly of highly skilled immigrants, would create considerable economic costs in the short and long run. Admitting more highly skilled immigrants, from inside or outside the EU, is particularly vital to long-run economic growth. 
     
  • Auctioning employer permits to hire foreign workers would maximise the economic benefits of immigration and increase government revenue. 

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