Mike Coombes Tony Champion CURDS Newcastle University Acknowledgements:

1. Mike Coombes Tony Champion CURDS Newcastle University Acknowledgements: Emmanouil Tranos and Simon Raybouldandnumerous other CURDS colleagues plusfunding for related research fromODPM (now CLG) + EUROCITIES+ Gateshead MBC TWRI annual research conference: Newcastle 2 December 2008International migration: local policy issues in changing places and times

2. Aims of the presentation, and evidence base drawn upon There are four sections to the presentation, with a distinct objective in each rehearse ideas about migration and economic development in past research, highlighting key uncertainties, especially about the ‘applicability’ of policy implications to areas like Tyne & Wear (and perhaps in times of recession) look across Europe at the most recent data available to see the patterning of migration and its impacts at a city region scale, so as to recognise how far a migration policy in Tyne & Wear works with/against established trends evidence: CURDS study for EUROCITIES look across England at the early A8 migrant inflows to understand how far generalisations from other research were echoed in this new phenomenon evidence: CURDS study for ODPM (now CLG) and academic follow-up look at experience this year of migrants, employers and various agencies in part of Tyne & Wear to ‘ground truth’some implications from the above evidence: CURDS study for Gateshead MBC

3. 1) Why is migration relevant to economic development? Migration flows are people ‘voting with their feet’ and show an area’s relative attractivity in a highly practical sense Compared to ageing or other forms of demographic change, migration is by far the most dynamic process in its potential to alter an area’s labour market size and characteristics (eg. skill levels) SO to consider the impact of NET in-migration and thus population gain… An overall net in-migration usually embraces selective in-migration and that raises the number, and share, of the more highly-skilled in the workforce Gains in population size stimulates consumer expenditure locally and in turn this has a ‘positive multiplier’ effect on the local economy Population growth may lead the private sector to gain confidence in the area Growth in population (and perhaps employers) raises municipal fiscal strength and thereby increases resources available to fund economic development

4. International migration inflow: local/regional impacts British policy debate on labour market impacts of international migrant flows has been dominated by research commissioned/undertaken by DWP that show… the link between migrant inflows and national economic growth a link with eased labour supply constraints, and also wage rate moderation these processes mainly operating in lower-skill segments of the labour force The latter impacts will vary sub-regionally as this is not a very mobile workforce, and this implies mixed impacts on local residents – in the short-term at the very least – with negative effects for lower-skill workers [work by Warwick University has seen this] There are possible positive longer-term effects of increased growth [case study work for EUROCITIES supported this assessment] BUT if the impacts are mainly on low-productivity sectors then local industries surviving increased global competition may actually keep areas stuck in a low skill equilibrium If the migrants are very mobile they may be unlikely to settle – as with the flow through London from abroad and other UK regions – which means a policy for migrant attraction will need to permanently replenish the migrant inflow

5. Can local/regional policies alter migration patterns? ! This is basically the question that the presentation will return to at the end ! The conventional understanding from neo-classical economics, and modelled by regional science, sees net migration flows mainly as people responding to labour market ‘signals’ (primarily better prospects for well paid work) On this basis, economic development policy stimulates the local economy and net in-migration will follow (eg. New Towns having to attract employers); the multiplier effect then gives additional rounds of growth and migration If the growth is in ‘advanced’ sectors then the net in-migration is selective and this may well increase the multiplier effect (as highly-skilled = highly paid) However an alternative emphasis has come from Richard Florida (especially): areas FIRST attract and retain talented/skilled/creative migrants THEN the migrants enhance growth via innovation (boosting local productivity level) and/or entrepreneurialism (boosting stock of firms with growth prospects) In a ‘policy prescription’Florida says migrants want diverse and tolerant areas

6. Migration analysis linked to economic development In practice the Florida notion must be seen as supplementing the conventional model because it is proposing a group of migrants as the reason why some areas have faster growth in productivity and/or enterprise (which then will stimulate further migration and growth as the conventional model says) Thus it is difficult to assess how far evidence supports the Florida notion since this requires carefully disentangling ‘leads and lags’ in an on-going process (with ‘feed-back’ via the multipliers etc)…and then there’s data availability… Carrying out such analyses in relation to international migrants to local areas faces an impossible challenge in terms of data availability broken down by: age / sex / family status (eg. whether any accompanying dependents) nationality / country of birth and date of arrival in current location local area lived / worked in currently economic activity / skill level / ‘creativity’ / entrepreneurialism and so on…

7. Migration analysis re: economic development YES Florida and colleagues have carried out sophisticated analyses of the links at the city region scale between the proportion of the local labour force who are highly educated and/or creative – and the level of tolerance in the area – and the productivity and growth rate of the local economy BUT these analyses are of the USA in the last few years and they highlight the factors associated with growth in certain ‘advanced’ cities and their regions where migrants have gone voluntarily (ie. without any policy inducement) during a period when the national and international economy was booming SO the questions are how far is it possible for a policy > to influence migrants (rather than passively observe migration patterns) > given that people in Europe are generally less migratory than those in USA > and European international migrants may need to cross a language barrier > especially if their area has the characteristics of an older industrial area > especially when the national and international economy is not booming?

8. 2) International migration: what is the evidence? Migrant groups differ greatly in terms of their economic development impacts the higher-level skilled, perhaps moving within a corporation vs. the rest those who stay only short periods (even ‘gap’ years) vs. those who settle those who are single (and probably young) vs. those with dependents Important recent and on-going changes to the regulatory context proposed new system based on skills (eg. English proficiency) Scotland’s pro-migration policy for economic development adjustment to A8 migration from east/central Europe post-’02 Limited statistics on migration (even less on economic development impacts) agreed need for much improved UK data on international migration key UK problem of A8 data source (WRS): the outflows are unknown

9. Cities with data on non-nationals (and other factors) NUTS3 regions including (most of) the city region surrounding a medium-sized city (ie. an urban area with at least 200,000 but no more than 1.6million residents). 200 candidate city regions (as defined in above note); 100 with data on 2001 % non-nationals (none in UK); 60 also with data on 2004 from which 2001-4 change can be measured

10. Location factors and migration-intensity up to 2001 migration-intensity quartiles: SO: migrants gave gone to prosperous regions

11. Location factors and migration-intensity 2001-4 migration-intensity quartiles: SO: migrants still going to prosperous regions

12. Other factors and migration-intensity up to 2001 SO: migrants went to urbanised regions with good air links to the rest of Europe and few farms etc.

13. Other factors and migration-intensity 2001-4 SO: migrants increasingly going to larger cities, and to city regions with larger populaitons

14. 2001 migration-intensity and ‘downstream’ issues SO: prosperous regions (with more migrants) have not grown economically as quickly: “convergence”

15. 2001-4 migration-intensity and ‘downstream’ issues SO: prosperous regions (where migrants still went) grew economically less quickly: “convergence”

16. Summary conclusions from EUROCITIES evidence Migrants tend to flow towards more affluent city regions This pattern remained true even in recent years when there has been “convergence” in Europe: thus the migrant flows are less towards areas growing fastest than to those with high prosperity levels already The implication for city regions like Tyne & Wear is that they are not very likely to attract many migrants from more affluent parts of the world, and migrants to the UK may not choose to go to an old industrial region Inflows continue, from less affluent regions, even when a region is not growing as quickly as elsewhere and this does not necessarily stimulate relative growth (but the skill/creativity of these migrants is not known) BUT do these conclusions – which tend to cast doubt on international migrants coming to Tyne & Wear – square with evidence that recently many migrants did in fact come, from the A8 countries in particular? The next section of the presentation looks at the A8 migrant inflow in detail

17. 3) Evidence on A8 / other migrants to this country NET international migration inflows to UK 1991-2007

18. Evidence on A8 migrants Migrants from the “A8”countries: 8 former eastern bloc countries joining EU in 2003 (nb. 2 other countries joining at the same time – Malta & Cyprus – are excluded since their Commonwealth status had given their citizens UK labour market access for a long time) Predictions of A8 migrant numbers (made before 2003) proved far too low because the calculations did not reckon on other western European countries deciding not to admit A8 labour migrants The data source used here counts A8 migrants who register in the Worker Registration System: (they had all got jobs after entry) Much misinformation on A8 migration “In just over a year and a half – according to the local council – at least 3000 incomers have arrived in the town. They already make up 6% of the population - and they’re all from one country: Poland.” Poles come to Crewe, BBC News, 20.1.06

19. What is known about A8 migrants? No data on A8 migrant ‘stock’ in the UK at 1 time (ie. a Census equivalent) Data available from the Worker Registration Scheme (WRS) measures ‘flow’ No information on how long people stayed; many in WRS data may have left Some A8 migrants not in WRS (eg. self-employed or working illegally) By end 2005: 345,000 applicants (up to 30% had been in UK before May 2004) 83% of registered workers were aged between 18 and 34 97% had no dependants living with them in the UK 57% were male seasonal labour (eg. agriculture-related 7 hospitality) gives summer peak; each year’s peak has been higher than the one before The question: have A8 migrants gone were they will helpsolve labour shortages? (nb. few A8 migrants solved skill shortages, as most found only low skill jobs)

20. Where have different groups of migrants gone?2007-08 labour market entrants: newly registered National Insurance numbers (NINOs) from outside UK [by size of 1998 TTWA (approximated by LA grouping)] Location Quotients (LQs) = ratio of the actual number to the expected number

21. Statistical analysis of where A8 migrants went For all A8 migrants (& sub-groups by job* type or nationality) ~ place each migrant to England in a local authority, then group this dataset to LLMs: the 170 LLMs are local authority areas ‘best fit’ into 1998-2007 Travel-to-Work Areas across England ~ calculate location quotients (LQs): this is the ratio produced by dividing the LLM share of migrants by its share of all jobs ~ correlate these LQs vs. the LLMs’ employment rates, where the employment rate is the key measure of labour market tightness ~ carry out regression analyses to consider other factors driving the patterns of A8 migration inflows across England’s LLMs * job types devised from detailed examination of the non-standard data on the work A8 migrants are engaged in (eg. “Barrister – waiter”)

22. Job types identified by CURDS

23. A8 migrants, May’04-June’05 [LQs by separate LAs]

24. Employment rate measure of tighter labour markets

25. Correlation between LLMs’ total A8 migrant LQs and their employment rates only r = 0.09 On its own then, the relative tightness of labour markets does not substantially ‘explain’ the pattern of A8 migration This might have been because the total A8 inflow comprises a rather diverse mix of nationality and job type groups, but detailed results show that there is no large groups whose LQs are very highly correlated with LLMs’ employment rates In reality, we know there are will be many different factors shaping the A8 migration pattern because ‘push’ and ‘pull’ drivers have a diverse impact on all migration flows This means that it is necessary to move to a multivariate analysis such as regression modelling to assess the level of influence of labour market tightness, when other factors are accounted for too: results from this follow Technical note: the models have the observations weighted by LLM size so the emphasis is on predicting the values of larger areas, this indirectly causes every independent variable to be significant at 1%); the models are constrained to pass through the origin (ie. no constant)

26. Modelling strategy: independent variables

27. Overall results[adjusted R squared = .33]

28. retail/hos. manufac. agric.

29. Summary of evidence about A8 migrant inflows LM tightness [employment rate] is the second strongest influence (preceded by avoidance of areas with non-A8intensive sector jobs, and followed by avoiding areas with many jobs in manufacturing (etc) Retail/hospitality is the 1 group which can be modelled very robustly: the key drivers are similar to those for the total A8 migration flow Manufacturing worker distribution is not modelled at all successfully MOST migrant groups are attracted to areas where in 2001 more people born in E.Europe (or their own country, if known) already lived; Old industrial areas tended not to attract A8 migrants Need better quantitative data than is yet available How long do A8 migrants stay (a) where they ‘arrived’ (b) in the UK? What are the commuting patterns of migrants (eg. those with agencies)? Do migrants who stay tend to move into more appropriately skilled jobs? These questions need to be addressed through detailed study in one area

30. 4) What is the evidence from within Tyne & Wear? CURDS examined the potential of a Talent Retention policy for Gateshead and sought evidence on the potential for policies to attract more migrants and/or a higher share of more highly-skilled migrants enable migrants to find work which is suited to their skill levels, and also encourage migrants to remain in the area, contributing to the economy An overview of available data estimated the likely annual number of potential beneficiaries of a policy aimed at retaining in the area international migrants with higher levels of skill Surveys explored the current pattern of experience of international migrants local employers who recruit them various agencies who work with them

31. International migrants within an ‘upskilling’ strategy There are many (larger) groups in a future talented Gateshead labour force

32. International migrants: the past record of Gateshead Gateshead has little diversity in its population (even less than the rest of the NE) Diversity of 2001 populations as indicators of possible past migration

33. International migrants: likely future for Gateshead National forecasts are of a net LOSS of cross-border migrants for Gateshead

34. International migrants: what might happen next year Groups have very different annual inflow numbers and probable skill levels Speculative estimates of 2007-8 number of talented economic migrants

35. What then are the implications for Tyne & Wear? What are the impacts of international migration? migrants mostly get low-skill work (some well qualified but ‘doing a gap year’) impacts are negative for low-skill locals, at least in the short-term impacts may be positive longer-term (or ‘lock’ area in low-skill activities) diversity of area increases impact in short-term may be negative for community relations impact in longer-term may be more likelihood of attracting ‘creatives’ What are the prospects for policies to reap benefit from international migration? all the evidence (including from surveys in Gateshead) shows that net inflows will increase with better job prospects: increased numbers follow from areas moving up the affluence rankings (rather than affluence following the inflows); the same seems to apply to retaining migrants so they benefit the economy getting a higher share of more highly-skilled migrants (as Florida) in this area will in practice depend on (a) tapping the resource of the student inflow and/or (b) attracting back the ‘Geordie diaspora’ [maybe the 1 option whose chances have been improved by the economic slowdown as it is hitting London harder] migrants to Gateshead [barely any ‘Florida-like’] reported few problems with community hostility / housing / schools BUT better integration of services may ease arrival, and help with English remains vital (eg. work-related provision)

36. Annex: WRS data: records of gate-keeping CURDS analyses cover WRS data up to end June 2005 Postcode District (eg. NE4) of registration address Gender Date of Birth Nationality Outcome of Application Number of Dependents (by whether under 16) NOTHING on qualifications Job Title & Job Description [not standard categories] for example: other legal occupation – poultry catcher magician – production worker barrister – waiter