Data Insight: Wage progression and labour market integration of migrant workers in the UK

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We provide some initial statistics comparing the linked MWS-ASHE data to the Annual Population Survey, which demonstrate that the new ASHE-MWS dataset appears to be consistent with more traditional survey-based measures of labour force participation. 

Our analysis suggests that migrants have generally seen higher wage growth than non-migrants since the start of the century. This offsets, to some extent, the initial downgrading in wages experienced by migrants that other studies have found. However, this needs to be seen in the context that migrants who struggle in the labour market may be more likely than non-migrants to leave the UK labour market, and so results may be biased upwards. 

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The ASHE-linked to Migrant Workers Scan dataset is now available for accredited researchers to apply to access in the Office for National Statistics Secure Research Service. To find out more:

Background

Migration has played a vital role in shaping the UK labour market. The country saw large increases in inward migration after the European Union expanded in 2004 and 2007, and a big shift in migration patterns after Brexit. This research uses the linked Annual Survey of Hours and Earnings (ASHE)-Migrant Worker Scan (MWS) dataset to understand the dynamics of migrant employment, including their wage progression. 

The main source for migration is the Migrant Workers Scan (MWS), the government’s record of non-UK nationals who register for a National Insurance Number (NINo) to allow them to work in the UK. The MWS includes gender, age, date of registration, date of arrival and nationality. To understand more about migrants’ wages and their progression, we linked a 1% sample of the MWS with the Annual Survey of Hours and Earnings (ASHE), representing a 1% sample of employee jobs. 

To provide a comparative perspective and to contextualize the findings from the ASHE-MWS data, we also draw upon the Annual Population Survey (APS) as a benchmark. By analysing these datasets, this research aims to provide a comprehensive data-driven insight into the experiences of migrant workers in the UK labour market. 

In 2023 the Migration Advisory Committee (MAC) used a similar linked ASHE-MWS dataset to explore wage progression1. They concentrated on those who first appeared in the labour market 2002-2010 and explored how different factors such as tenure in the job and occupation affected wage growth. Their detailed model suggested  that, generally, migrant workers under-perform compared to UK nationals in similar roles and with similar job characteristics. 

In this paper we step back to draw out some descriptive patterns in the characteristics of migrants over time rather than constructing an explicit model.

Read the findings in the full publication

Why it matters

These findings present a different perspective to the MAC report, which found that migrants do not perform as well in the labour market as non-migrants. However, this can be reconciled by noting that the MAC study found that migrants arriving in the UK faced a substantial initial downgrading of their jobs (that is, migrant workers found themselves in much lower grade roles than their qualifications should suggest). In other words the higher wage growth we see here should be seen in the context of lower initial wages compared to similarly-qualified individuals. This emphasises the importance of understanding both level and change in the labour market.

 

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