10/01/2012 00:40 GMT

Immigration Has No Effect On Unemployment, Says Think Tank

Immigration has no impact on unemployment, according to research released on Tuesday by the National Institute for Economic and Social Research (NIESR). Their findings directly contradict claims made by Migration Watch UK on Monday, who suggested a "correlation" between Eastern European immigration and record levels of youth unemployment.

The NIESR claims to have used National Insurance number registrations by foreign nationals for the first time to analyse the impact of immigration on the UK labour market. Previously only Labour Force Survey data was normally used. The NIESR believes that when migration levels go up, the number of people looking for work goes down, but even then, the effect is negligible.

In detail; every percentage point increase in the migration rate is associated with a reduction in the claimant count rate of between 0.01% and 0.004% (depending on GDP growth rates). The claimant count rate released by the Office for National Statistics measures the number of people claiming unemployment-related benefits.

The report concludes: "For all practical purposes, these results suggest that migration has essentially no impact on claimant count unemployment."

However this data analysis would exclude those who had become economically inactive, including those who had given up searching for work and claiming Jobseekers' Allowance.

Meanwhile Migration Watch UK said on Monday that 600,000 more migrants are working in the UK since the so-called A8 countries ( Poland, the Czech Republic, Hungary, Slovakia, Slovenia, Estonia, Latvia and Lithuania) joined the EU in May 2004 - while youth unemployment had risen by 450,000 during the same time period.

Sir Andrew Green, chairman of Migration Watch UK, said on Monday that "it is implausible and counter-intuitive to conclude - as the previous Government and some economists have done - that A8 migration has had virtually no impact on UK youth unemployment in this period”.

Youth unemployment in the UK is running at record levels, having increased from 575,000 in the first quarter of 2004 to 1,016,000 in the third quarter of 2011, figures from the Office for National Statistics (ONS) show. Over the same period, the number of workers from the A8 grew by 600,000

On Sunday, the New Economics Foundation (NEF) think-tank, argued that if everyone worked fewer hours – say, 20 or so a week – there would be more jobs to go round, employees could spend more time with their families and energy-hungry excess consumption would be curbed.

Anna Coote, of NEF, said: "There's a great disequilibrium between people who have got too much paid work, and those who have got too little or none."

After reading the NIESR report, Sir Andrew Green said: "This study is of the aggregate effect on the labour market. It does not address youth unemployment."