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The UK is one of the only countries in Europe (EU24) where degree-educated migrants from EU countries have a higher-employment rate than their similarly-educated non-migrant counterparts, according to a new report published by IPPR today. Degree-educated migrants from new EU member states working in the UK are ten times more likely to be in low-skill work than degree-educated non-migrants.

The report is part of a programme of research supported by the global JPMorgan Chase New Skills at Work initiative, and shows that there remain important discrepancies between the employment outcomes of migrants and non-migrants across Europe.

Of all the countries included in the report only in the UK did migrants from both EU15 and new member-state countries have higher employment rates than non-migrants. However, the report also shows that this is in part explained by significant numbers of degree-educated migrants working in lower-skilled jobs in the UK.

The report therefore illustrates that migrants are more likely than other workers to have their skills under-utilised, as lower employment rates and the misallocation of skills for different migrant groups mean talents are going unused. There are higher concentrations of migrants (relative to non-migrants) in industries that are often associated with low-skill and insecure work, and this effect is more significant in the UK than in Germany. For example, 12% of employed new member state migrants work in hospitality, and 13% work in construction while for non-migrants the equivalent figures are just 4% and 8% respectively. The report suggests that this may be due to:

Employers being less likely to recognise qualifications and experience gained abroad
Discrimination
Pay differentials between countries of origin and countries of destination may mean a greater willingness on the part of some migrants to work in lower-skill jobs
Migrants being more flexible and able to meet the specific needs of employers in sectors such as hospitality.

The report also shows that in the UK migrants coming from outside of the EU have by far the lowest employment rates - on average seven percentage points lower than for the non-migrant population. This gap is almost entirely accounted for by low female employment rates among non-EU migrants relative to women in the non-migrant population, irrespective of qualification level. The employment rate for degree-educated non-EU migrant men was almost exactly the same as for their counterparts in the male non-migrant population, compared with an employment gap of 16 percentage points between degree-educated women from the non-EU migrant population and degree-educated non-migrant women.

Across the EU24, migrants also face particular challenges integrating at the higher end of the workforce - as the report shows, the relative employment gaps between migrants and (otherwise similar) non-migrants across the EU24 are larger for those with higher qualification levels. Degree-educated migrants from new member state countries have an employment rate in the EU24 four percentage points lower than non-migrants with the same level of education. Yet for low qualified migrants from new member state countries, the employment rate across the EU24 is six percentage points higher compared with low qualified non-migrants.

The report, which presents new statistical analyses of European labour markets in order to identify where, how and to what extent migrants are underutilised, finds that:

The difference between the employment rates of degree-educated migrants and degree-educated non-migrants is larger than the gap between migrants and non-migrants within any other qualification group, which indicates a particular lack of inclusivity in the high-skill jobs market.
Employment rates were also much lower among non-EU migrants in general (relative to non-migrants), irrespective of qualification level.
The proportions of degree-educated migrants from new member-state and non-EU countries employed in low-skill jobs were far higher than those of their counterparts in the non-migrant population.

Alfie Stirling, IPPR Researcher, said:

"The UK is the best in Europe at employing EU migrants. This means that in the UK highly-educated migrants have similar employment rates to non-migrants. However, these migrants are still far more likely to be underutilsed at work than the non-migrant population due to disproportionate levels of employment in low skill sectors of the economy.

"While the employment rate of EU migrants is good in the UK, we need to be thinking about the best ways to utilise the skills and talents of all migrants by ensuring that they are in jobs suited to their skills and particularly that integration is improved at the higher end of the jobs market, as well as in community life more generally. By doing this we can make sure that migrants who do come to the UK can make the maximum economic contribution.

"Ensuring that the skills of all workers, including migrant workers, are used to best effect across the economy must be a key part of any successful approach to tackling the UK's skills shortage and low productivity growth."

As well as making comparisons with countries across Europe the report shows, through comparative analysis of migrant employment outcomes in Germany and the UK, that migrants in Germany are underutilised due to low employment rates, whereas in the UK relatively low employment rates are largely limited to the non-EU migrant population. The report also shows:

On average, migrants have higher employment rates in the UK than in Germany. For example, the employment rate for UK migrants from new member states was around nine percentage points higher compared with Germany.
In Germany, all migrant groups have lower employment rates than non-migrants, while in the UK this is true only of non-EU migrants.
In the UK, the employment of certain migrant groups is much more concentrated in specific (low-skill) sectors of the economy than in Germany.
The higher employment rates among new member-state and non-EU migrants in the UK, relative to those in Germany, appear to have come at the cost of higher proportions of degree-educated migrants in these nationality groups being employed in lower-skill jobs.
This over-qualification is most common among men who took up residency prior to 2007.

Notes to editors

The new report – Migrant employment outcomes in European labour markets – will be available from Friday 3 April http://www.ippr.org/publications/migrant-employment-outcomes-in-european-labour-markets

In this analysis, and in-keeping with similar publications by IPPR (see Dolphin et al 2014), we include in our study those European nations that are also member states of the Organisation for Economic Co-operation and Development (OECD), otherwise known as the 'EU24'.

Migrants made up around one in 10 (9 per cent) of the non-student working age population across the EU24 group. Within this population, the average gap in employment rates for migrants as a whole was significant, with a difference of 8 percentage points between the employment rate of migrants (64 per cent) and non-migrants (72 per cent)

In this report IPPR consider underutilisation in terms of two key indicators: lower employment rates, and higher levels of underemployment (in terms of overqualification), relative to the non-migrant population.

The legal definition of a migrant differs from country to country, and there is no universally recognised statistical definition across the academic literature.7 Nevertheless, the following three statistical definitions are among the most commonly used (Hawkins 2015).

Somebody born in a country other than their country of residence.
Somebody with a nationality different to their country of current residence.
'Someone who changes their country of usual residence for a period of at least a year, so that the country of destination effectively becomes the country of usual residence'

For the purposes of our quantitative analysis, we define a 'migrant' as someone who fulfils definitions one and two.9 Thus, according to our definition, a migrant must both:

have been born in a country that is not their country of current residence, and
hold a nationality different to the country in which they reside.

IPPR divides the European population into four mutually exclusive categories.

'Non-migrants' are defined as all those who do not satisfy the dual criteria above.
'European Union 15' (EU15) migrants are defined as those who fulfill our definition of a migrant, and who also self-report their nationality as one of the 15 current member states whose membership of the EU pre-dates 1 April 2004.
'New member state 13' (NMS13) migrants are those who satisfy our definition of a migrant and report their nationality as one of the current EU member states which acceded on or after 1 April 2004.
'Non-EU' migrants are those who we define as 'migrants' and report their nationality as countries outside of the EU.

The JPMorgan Chase New Skills at Work programme in Europe is a three-year, $30 million initiative which aims to identify strategies and support solutions that help improve labour market infrastructure and develop the skilled workforce globally. The initiative brings together leading policymakers, academics, business leaders, educators, training providers and nonprofits with the goal of connecting labour market policy with practice, supply with demand and employers with the workforce – all to strengthen the global economy. The overall programme is a five-year $250million initiative, the largest-ever private-sector effort aimed at addressing the "skills gap" that exists across many industries globally.

Contacts

Sofie Jenkinson, 07981 023 031, s.jenkinson@ippr.org

Richard Darlington, 07525 481602, r.darlington@ippr.org