Peaking too early?
Today’s Migration Quarterly Statistics from the Office of National Statistics are being pored over for pointers as to the possible post-referendum direction of net migration. While they show overall net migration continuing around record levels, they cover a period largely before the referendum and so not much of a guide to any immediate or future impact.
However, they do include new statistics on the number of National Insurance Numbers (NINO) issued in the three months after the referendum and as we already have labour market figures for those months they might prove more interesting. My partner in this particular crime, Jonathan Portes, thinks that both the NINO data and the labour market data suggest that EU migration has peaked and will enter a sharp decline. As I noted yesterday, that’s what the Office for Budget Responsibility thinks too. None of us can be certain about the future, but I don’t think the latest data shows any real sign of a peak in EU migration, and particularly not a peak for the Eastern European countries that joined the EU in 2004 (the A8).
Jonathan said before today’s statistics
I don’t think that the admittedly very small increase in EU-born workers in the July-September period is a sign of flattening off as there is something of a seasonal pattern in these figures, with growth typically being least in the third quarter of the year and the number of EU workers often actually shrinking even when there is high growth over the whole year.
Then commenting on today’s NINO data, Jonathan notes that the number being issued has flattened off too and thinks that putting this together with the employment figures a sharp fall is coming.
Unfortunately little can be inferred from the NINOs issued because of the large discrepancy between their numbers and both the International Passenger Survey (IPS) record of people arriving for work and LFS record of people actually in work. This is explained by the ONS as down to people coming to the UK, getting a NINO, staying for a short time and then going away again, as the IPS counts only people who say they are coming to stay for a year or more, and the LFS counts only people who say they are usual residents of the UK. Change in the number of NINOs issued could be because of changes in long-term arrivals or changes in short-term arrivals. It just isn’t possible to tell. It’s interesting to compare Jonathan’s picture of rolling annual NINO issue with rolling annual change in employment for the same country breakdown.
Broadly, increasing numbers of NINOs go with increasing growth in EU14 and EU2 employment. But not so EUA8 where employment growth has increased sharply during periods where NINO issue has changed little. This cannot be explained by lags between arrival and applying for a NINO, nor between either of these and actually getting a job.
I think what is actually happening for people from the A8 countries is a continuing steady inflow. It’s true that there appeared to be a drop off in employment at the beginning of the year (which might have been a sign of renegotiation uncertainty!) but as Madeleine Sumption from the lengthily-titled Migration Observatory at the University of Oxford told a House of Lords Committee earlier in the week, the numbers in work also have to be placed in the context of employment rate. The ONS report employment rate for 16–64 year olds but employment level regardless of age. However, as there are hardly any people aged 65 and over from the A8 countries in the UK, an implied adult population accurate enough for these purposes can be simply calculated by dividing the number in work by the employment rate. The smoother recent trend of implied population suggests that people continued coming to the UK at a steady rate but for some reason found getting work a bit more difficult than usual before normal service resumed as the year went on. On these data, there is little sign of flattening off, let alone peaking.
Finally, just an observation about the IPS figures that count the numbers of people who say they are arriving in the UK as long-term migrants (which means intending to stay for a year) and what they say they is their purpose in coming to the UK. In their quarterly figures for the past three years, the IPS has reported quarter after quarter that around 50,000 people had arrived from A8 countries to work in the UK over the previous year, split roughly 50/50 between those with a definite job to come to and those coming to look for work. However, these numbers bear no relation at all to the actual outcome in terms of change in the number working in the UK.
In conclusion, I don’t think either NINO issue nor IPS data provides a reliable forward indicator. To the extent that the LFS data exhibits a trend, I don’t think that these (yet) indicate any imminent change in trend.
Que sera, sera.
