About the project

Immigration and economic well-being

Immigration has long been a contentious topic in political discourse, and there has been much debate surrounding the economic impact of immigration for host-country residents. Fortunately, when it comes to understanding the economic impact there is a rich empirical literature from which we can draw on. This literature suggests that while there is some uncertainty, particularly regarding short-run effects in the US, immigration is not associated with any tangible negative labour market impacts. For studies based on the UK, the emerging consensus is that immigration does not negatively impact the job prospects of residents. One reason for this is that although migrants enter the labour market, they create jobs too by using the wages they earn to support economic activity in the local economy. Another reason is that migrants tend to complement, as opposed to compete against, existing workers by often doing the tasks others don’t want to do.

When it comes to wages, the evidence would suggest that immigration has little or no impact overall, but may place some small downward pressure on the wages of the low-skilled, while the effect on the rest of the distribution is positive. The overall conclusion is that while immigration may have a small negative impact on the wages for relatively low-skilled cohorts; relative to other factors (e.g. technological change, tax policies, the National Minimum Wage) the impact is minimal. Considering fiscal outcomes, migrants are commonly found to make a substantive net positive fiscal contribution overall. This is perhaps unsurprising when one considers that migrants tend, on average, to be more likely to be at work and less likely to access social services.

Immigration and subjective (self-reported) well-being

While there is a lack of evidence to suggest that immigration negatively affects the welfare of host-country residents, it is still often associated with hostile political reactions. Much of the rhetoric underpinning debates surrounding the UK referendum on EU membership, for instance, revolved around ‘taking back control’ over immigration policy. Survey evidence also suggests that Britain is not particularly welcoming to migrants with the majority of the public being opposed to more immigration.

Focusing on subjective as opposed to economic indicators of well-being could offer a useful framework when it comes to better understanding anti-immigration attitudes in the UK and indeed the rise of this sentiment throughout Europe and the US. While immigration may not impose economic costs, it could be a source of psychological distress for natives based on the belief that migrants are an economic or cultural threat as opposed to actually having a negative impact. Accordingly in this study we move beyond ‘objective’ measures of welfare such as wages and unemployment, and examine to what extent immigration affects the subjective (self-reported) well-being of the UK-born population (either positively or negatively). The main indicator of subjective well-being we use in this work is the General Health Questionnaire (GHQ-12). It is a widely used measure of subjective well-being which consists of a 12 item aggregated scale designed to measure a variety of components of individuals’ mental well-being such as anxiety, social dysfunction and general happiness. Some examples of the types of statements included in this measure include: ‘Have you recently felt unhappy or depressed’, ‘Have you recently lost much sleep over worry?’; and ‘Have you recently been able to enjoy your normal day-to-day activities?’

Our methodological approach involves spatially linking large-scale household longitudinal datasets such as the UK Household Longitudinal Study which records individuals subjective well-being with immigration statistics and indicators of diversity from the Office of National Statistics. Using this dataset, we analyse the relationship between inflows of migrants into local areas and individuals subjective well-being over time using a variety of panel-data analytical techniques.

Key findings

Main effects

  • We find that for the population as a whole, the effects of immigration during the 2000 to 2017 period for UK-born residents in the UK is small, but having said that, there appears to be certain sub-groups where the effects are negative and more notable.
  • The sub-groups most likely to experience a reduction in subjective well-being in response to increases in immigration include relatively older individuals (e.g. over 60s), those with below average household incomes, those without any formal educational qualifications and/or the unemployed.
  • Subjective well-being differences across sub-groups closely mirrored voting patterns in the recent UK referendum on EU membership, i.e. those individuals most likely to vote ‘leave’ are those groups we identify as being most likely to be negatively affected in subjective well-being terms by immigration
  • In contrast to their UK-born counterparts, non-UK born residents in the UK experience an increase in subjective well-being in response to increases in immigration

See Howley, P., Waqas, M., Moro, M., Delaney, L., & Heron, T. (2019). It’s Not All about the Economy Stupid! Immigration and Subjective Well-Being in EnglandWork, Employment and Society. DOI: 10.1177/0950017019866643

What can explain these findings?

Flawed economic reasoning: Inflows of migrants could be a source of psychological distress for UK-born residents based on the belief that it lowers their economic opportunities, as opposed to actually having any tangible impact. In support of this premise, we find that the negative association between immigration and subjective well-being is much more pronounced in times of economic stress (e.g. when GDP is relatively lower).

See Howley, P., Waqas, M., Moro, M., Delaney, L., & Heron, T. (2019). It’s Not All about the Economy Stupid! Immigration and Subjective Well-Being in EnglandWork, Employment and Society. DOI: 10.1177/0950017019866643

Identity, personality and trust: Strength of attachment to an ethnic identity appears to play an important role in predicting the degree to which individuals will be impacted (if at all) by immigration. A psychological framework called social identity theory offers a potential explanation. This relates to the idea that people are naturally inclined to self-categorise into an “in-group” (us) versus an “out-group” (them). In turn, people belonging to the in-group are less likely to be trusting of out-group members. It is not hard to see that UK-born residents, especially those with relatively strong attachments to their own ethnic identity, may perceive themselves as part of an in-group and immigrants as part of an out-group. 

Personality traits reflective of openness and trust also appear important.  One possible explanation is that individuals with higher scores on these traits are generally more innately interested in interacting with people from different cultures.

See Howley, Peter and Waqas, Muhammad and Ocean, Neel (2019) Open Minds, Open Borders: Immigration and the Mental Well-being of Natives. Leeds University Business School Working Paper. DOI: 10.2139/ssrn.3321720

Englishness – Ethnic v Civic models of nationalism: We identify patterns of attachment to national identity as an important mechanism underpinning our findings. In particular, the relationship between immigration and subjective well-being in the UK appears to depend on ethnic and civic models of nationalism. In the UK, both of these national identities are common through ‘Englishness’ and ‘Britishness’. We find no evidence to suggest that people who think of themselves as British are adversely affected by immigration with negative effects concentrated on those who identify as English.  Our proposed explanation is that migrants will be more likely to be seen as ‘outsiders’ for people who think of themselves as English given the importance placed on shared ancestry under ethnic as opposed to civic models of nationalism.

See Howley, Peter and Waqas, Muhammad (2019) ‘I Say, Sir!’: The Difference Between English and British Identity in Moderating the Effects of Immigration on Mental Well-Being. Leeds University Business School Working Paper. DOI: 10.2139/ssrn.3464210

Going forward

The main concern with these findings is that if, despite overwhelmingly positive economic benefits, immigration is associated with adverse effects on the subjective well-being of certain groups in society, then this makes the challenge of integration more difficult. In these circumstances, it becomes important to understand the mechanisms underpinning the relationship between immigration and subjective well-being. Our results highlight the importance of invisible differences between people as playing an important role in shaping public reactions to demographic and cultural changes.