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>  News Releases >   2007 >   January

Dartmouth economist argues that UK immigration improves the labor market in that country

Dartmouth College Office of Public Affairs • Press Release
Posted 01/26/07 • Susan Knapp • (603) 646-3661

David Blanchflower (Photo by Joseph Mehling '69)

Earlier this month, Dartmouth professor of economics David Blanchflower delivered a speech to the Cambridgeshire (UK) Chamber of Commerce. During that talk and in a subsequent research paper, he outlined his study of how recent migration to the UK has impacted the UK economy. He concluded that the entry of migrants, specifically from Eastern Europe, appears to have improved the workings of the UK labor market, reduced wage and inflationary pressures, and lowered the natural rate of unemployment.

Blanchflower, who also is a member of the Bank of England's Monetary Policy Committee (MPC), worked with colleagues Jumana Saleheen and Chris Shadforth, both external members of the MPC. They examined UK population growth over the last 35 years, which has been low compared to other countries including the United States, Canada, France, Ireland, and Japan, and they looked into the rapid rise in the number of immigrants from East European countries, so-called A8 countries that joined the European Union in May 2004.

"We found little or no evidence that immigrants have had a major impact on UK labour market outcomes such as wages and unemployment, and this is consistent with work by a number of other authors," say Blanchflower. "In fact, we argue that at present, the entry of recent A8 migrants appears to have improved the workings of the labor market, reduced wage and inflationary pressures and lowered the natural rate of unemployment."

Blanchflower, as a member of the MPC, cites this UK immigration research as one of the reasons he has voted against raising interest rates three times since last August. Despite his vote, the MPC has raised interest rates, most recently in January, to 5.25 percent. In the January vote, the increase only passed by the narrow margin of 5-4.

Blanchflower also holds the Bruce V. Rauner '78 professorship in economics at Dartmouth.

Read Blanchflower's paper.

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