economic impacts on london and the uk of regularising irregular migrants ian gordon and kath scanlon...
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Economic Impacts on London and the UK of
Regularising Irregular Migrants
Ian Gordon and Kath ScanlonLSE London research centreLondon 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 thusdifference 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 80-100% of irregulars counted in Census
Updated National Estimates as of end-2007
(000s)Central
Estimate
Lower
Estimate
Higher
Estimate
Woodbridge:
2001 estimate of irregular migrants
430 310 570
2001-7 change in numbers of:
Resident failed asylum seekers +219 +219 +219
Overstayers/illegal entrants +50 +21 +79
Regularised 2003-7 (including from EU accession countries)
-166 -177 -149
Total irregular migrants at end-2007 533 373 719
UK-born children 85 44 144
Total irregular resident population
at end-2007618 417 863
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
Regularised 2003-7 (including from EU accession countries)
-100 -91 -108
UK-born children 61 30 105
Total irregular resident
population at end-2007442 281 630
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 long-run 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
• 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
Summary (3)