Transcript Impacts of Recent International Migration on a Destination

Economic Impacts on London
and the UK of
Regularising Irregular Migrants
Ian Gordon and Kath Scanlon
LSE London research centre
London School of Economics
Asylum, Refugee and Migration project group, London Funders
7th September 2009
The Study
• Rapid review for GLA to inform Mayor's thinking
• Scheme: regularisation after 5 years/no crime
• Brief:
• to review lessons from international experience
• to estimate numbers eligible for such a scheme
• to identify/quantify likely economic and fiscal
effects
The Context
• Build up around 2000 of large irregular
population – most now unlikely to be
deported
• Tightening of immigration control:
• points system
• more rapid processing of asylum requests
• improved border controls and stronger removal
powers
• Planned ‘path’ to earned citizenship, limiting
rights of regular migrants until full citizenship
achieved
The Subject
• Who are 'irregular residents'?
• Failed but unremoved asylum seekers (appeals
exhausted)
• Illegal entrants who evaded border controls or
entered on false papers
• Overstayers
• UK-born children of two irregular migrants

Not included: Legal migrants in breach of visa
conditions
Caveats
• In theory irregular residents included in census
figures, but
• overstayers and illegals not directly countable
• little data about distinctive characteristics/behaviour
• Situations vary greatly
→ big disparities in degree of ‘irregularity’ and thus
difference that regularisation would make
• Study involves indirect inferences, assumptions
and interpretations from statistical sources and
qualitative studies/ informants
• therefore only best estimates
Estimating Numbers
• Three possible approaches:
1) Bottom-up estimates for particular categories
Only feasible for failed asylum-seekers
2) Informed judgements about numbers from
particular communities
Information inconsistent and patchy
Estimating Numbers (2)
3) 'Residual method': Compare two
estimates from official statistics
•
Census-based total (de facto) migrant population stock
•
Flow-based estimate of legal numbers
• Basis of Home Office estimates for
2001
• Yields range of figures – assuming 80100% of irregulars counted in Census
Updated National Estimates as of end-2007
(000s)
Central
Estimate
Lower
Estimate
Higher
Estimate
430
310
570
Resident failed asylum seekers
+219
+219
+219
Overstayers/illegal entrants
+50
+21
+79
-166
-177
-149
533
373
719
85
44
144
618
417
863
Woodbridge:
2001 estimate of irregular migrants
2001-7 change in numbers of:
Regularised 2003-7
(including from EU accession countries)
Total irregular migrants at end2007
UK-born children
Total irregular resident population
at end-2007
London Estimates as of end-2007
(000s)
Central
Estimate
Lower
Estimate
Higher
Estimate
Failed asylum seekers at 2001
229
215
243
Growth in failed asylum
seekers
131
99
164
Overstayers/illegal entrants
121
28
226
-100
-91
-108
61
30
105
442
281
630
Regularised 2003-7
(including from EU accession
countries)
UK-born children
Total irregular resident
population at end-2007
Numbers Eligible for Regularisatioin
• Single criterion: 5 years residence
• UK – 412,000 (range 273,000 –
583,000)
• LONDON – 294,000 (range 194,000 425,000)
Remember: only best estimates
Issues about Scheme Design
• Overseas experience
• Mediterranean countries, USA
• context often quite different
• little systematic evaluation
• Issues include:
• eligibility (e.g. what kind of crime disqualifies – and
then what?)
• permanence/conditionality of residence granted –
and what happens to those who lapse ?
• what additional rights/entitlements (and
obligations) follow
• fraud – a major problem even in US schemes
Economic Impacts of Regularisation
• Biggest positive effect: better use of labour
skills
• impacts on social welfare – migrants’ own
security, social cohesion and GDP
• Scale of impacts depends on
• how regularisation changes migrants’ position
• how it modifies their behaviour
• knock-on effects in housing/labour market and
community
• Little hard evidence available
Labour Market and GDP
• Labour market
• Little evidence on labour-market position of
irregulars in UK
• Are they disadvantaged in labour market?
• Does disadvantage stem from irregularity?
• Cannot assume all/most are outside formal economy
• Inferences from Labour Force Survey suggest
• earnings 30% lower than other migrants
• employment rate 50% to 75% of that of other migrants –
but gap reduces to 6% after control for other sources of
ethnic/social disadvantage
• GDP
• Eliminating these differentials could raise UK GDP
by £3 bn (0.3%)
Social Housing and Social Cohesion
• Social housing
– Short-run: Regularised not entitled
– Long-run: demand for more than 70,000 extra
units
• Unlikely to be supplied; effect then would be greater
competition for access
• Social cohesion
– Impacts depend on extent of current integration
with local community
– Reduced victimisation; greater conformity with the
law
– Greater competition for scarce public resources,
notably social housing
Public Sector Costs
• Administrative costs of implementing
the scheme
• Additional demands on public services
• Potential increases in benefit payments
to eligible households
• Estimates based on publicly available
statistics plus interview programme
concentrated in London
Administrative Costs
• Direct costs based on current UK Border
Agency ‘legacy’ programme: £300m
• Costs might be higher if programme
incentivises additional migration
– However the scale of this depends on how
well the new border controls are
implemented
Public Service Costs: Issues
• What services do irregular migrants currently
use?
• Do public-service providers distinguish
between irregular and regular migrants?
• Are irregular migrants afraid to use public
services?
• How might regularisation change their
behaviour?
• Would the regularisation scheme lead to ILR
or the 'path to citizenship'?
Local Services
• Education: all children 5 - 16 entitled and
directly funded – even if irregular
• For many local services only status check is
address (e.g. nursery schools and social care)
• For such services any change in cost would
come from regularised migrants feeling more
able to come forward
Local Services (2)
• Little/no change in cost for many local
public services (e.g. fire; environment;
planning; culture and leisure)
• Police and ambulance services could
see costs fall if fewer irregular migrants
become victims or need Accident and
Emergency services
Health
• Many irregular migrants do not seek health
care/seek only in emergency: costs are
higher
• Little evidence of exclusion from primary care
• Hospital care: irregular migrants less likely to
seek treatment (e.g. pregnancy, cancer)
• Communicable diseases: TB, HIV/AIDS -regularisation might reduce costs
Housing and Welfare
• Those 'subject to immigration control' have
no access to social housing/housing
benefit/local housing allowance
• Status is checked
• With ILR/citizenship, costs could rise--many
households have low incomes and are
currently inadequately housed
• Most other benefits, including social security
and tax credits, not available until the
resident has ILR
Public Service Costs
• Interview evidence/financial data suggest
immediate increase in public service costs of
around £410m in the UK , £240m in London
• Once residents are eligible for social security,
tax credits and housing benefit, costs could
rise to about £1bn in the UK, over £700m in
London
• These are only estimates/inferences
Tax revenues
• Migrants whose status shifts from
irregular to regular might then
contribute 15% of weekly earnings to
the tax take – around £1,450 per adult
p.a.
• This could rise as employment
opportunities improve to perhaps
£1,720 per adult p.a.
• This implies an increase in revenue of
some £846mn p.a.
Summary
(central estimates)
• Nearly 620,000 irregular residents in
the UK; of which some 440,000 are in
London (70%)
• Of these perhaps two thirds might be
eligible for regularisation – some
410,000 in the UK and 295,000 in
London
• With supportive policies, over the longrun GDP might increase by £3bn (0.2%)
Summary (2)
• Increased tax revenue would be around £850m
p.a.
• Immediate increase in public service costs
something over £400m p.a.
• As migrants become eligible for welfare benefits
costs could rise to over £1bn
• In addition there are one-off administrative
costs of around £300mn
• Figures for London are £600m tax revenue;
£240m public service costs rising to £710m plus
with welfare costs; and £210m one-off
administrative costs
Summary (3)
• Figures are estimates; actuals will depend on
precise provisions of scheme and who takes
up
• Potential incentive effect of a successful
scheme? Effect unlikely to be large
• Making a regularisation scheme work would
require careful design; integration with other
initiatives; and complementary policies to
address equal opportunities and the informal
sector