UK’s Brexit policy restraining migration does not augur well for its economy, says IMF

UK Brexit Policy

One of the latest research on immigration said that immigration improves efficiency and develops economy of the developed nations. The report of the International Monetary Fund (IMF) on immigration states that one percent expansion in the immigrant population results in additional two percent growth in GDP per capita income in the longer duration.

The enhanced growth is a result of increased work force efficiency, than mere expansion of workforce population.

Theresa May, British Prime Minister, is keen on restraining immigrant inflow to the UK as a part of the Brexit policy. She has clearly indicated that the open trade arrangement with the EU will be given up to secure complete control over its borders. The UK PM is also inclined towards curbing the visa policy for students as she considers it to be misused extensively.

Business Insider quotes Amber Rudd, the Home Secretary, as echoing the tone of the Prime Minister by declaring that the yearly migration inflow would be restricted to some thousands, down from the current 300,000 plus numbers.

The voters of Britain might endorse the views of their PM, but the research of IMF indicates that the consequences of her policies will adversely impact their country’s economy. A developed nation requires workers having both high and low skills over a long period of time.

The research study conducted by the IMF shows that the affluence that the immigrants bring is generally distributed over the entire population. A hike in the overseas population is beneficial to the lower ninety percent and the highest ten percent of the wage earners, although the highly skilled overseas population benefits the top ten percent more.

Immigrant work force has a major influence on productivity by increasing the growth by two percent. This affects British economy in the background of acute productivity issue that it faces. The growth is not just provided by the highly skilled workforce but even by the average and lower levels workforce which contributed to 1.8 percent growth in the period of 1980-2000 in the countries in which the research was conducted.

The three factors that provide the enhanced growth to the economy as per the report can be briefly summed up. First, the low skilled immigrants occupy vital positions when the local population is lower.

As overseas workers with low skills are being more employed in menial jobs, the native workers can advance to more intricate occupations where their linguistic skills help them.  Finally, the ‘baby sitter’ effect, the immigrant workers with low skills provide domestic and baby care services, which enable mothers with high skills to contribute to the economic growth.

Pin It