The Effects of Migration on the Labour Market
Immigration can bring many positive effects on an economy.
+ Increases the amount of labour supply
+ Big benefit if migrant workers are young and skilled
+ Migrants spend money here which increases aggregate demand
+ Can help to fill skill shortages e.g. doctors and nurses
+ Decreases market wage rates (good thing for firms and international competitiveness)
Immigration also brings some negative effects
- Decreases market wage rates (bad for workers living here – their standards of living may be degraded)
- Unskilled workers do not benefit the economy as much as skilled workers
Therefore, governments will generally encourage migration of workers to their country.
E.g. Canada’s Federal Skilled Worker Program – allows applicants from 347 different occupations to apply for permanent residency if certain criteria is met.
One of the EU’s main features it the free movement of labour. Members of the EU must allow all labour from any country within the union to work in their countries. There has been an influx of workers from Eastern Europe in the UK. They have been attracted to the higher wages paid in the UK.
The UK has experienced net inward migration. So, the labour force is increasing in size due to migration and this helps deal with the ageing population problem.
The effects of migration on the labour market - an increase in labour supply, a depression of the market wage and increase in quantity of labour.
The UK is pulling out of the EU.
One reason for voting Leave was due to immigration. The EU promotes the freedom of movement of labour. However, it does not restrict workers from specific occupations. All skill levels are welcome. This has been a bad thing as it has also attracted unskilled workers. People believe that current levels of immigration are unsustainable.
We hope you enjoyed reading this content. Want to pass your Economics exams? Hire a specialist economics tutor today. At mrbanks.co.uk, we supply online Economics tuition to support you through your exams.
Online tuition provides so many benefits.
It’s cheaper. It’s less time-consuming. It’s effective.
Want to try before you buy? Contact us to book a trial lesson. You can see if online tuition is right for you.
Contact us today and book a trial lesson with an online Economics tutor.
Want to improve your knowledge further?