The Impact of Immigration on Wages and Employment in the UK Using Longitudinal Administrative Data

Sara Lemos () and Jonathan Portes ()
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Sara Lemos: University of Leicester
Jonathan Portes: King's College London

No 18199, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the labour market impact of immigration to the United Kingdom, focusing on the large inflows following the 2004 EU enlargement. Using the Lifetime Labour Market Database (LLMDB)—a longitudinal 1% sample of National Insurance records—we provide the first analysis of immigration’s effects on employment and wages based on high-quality administrative microdata. Exploiting individual, area and time fixed effects, as well as area-time, individual-time and individual-area fixed effects, we reduce endogeneity concerns that have limited previous work. We find limited aggregate impacts, but distributional consequences: existing immigrants—particularly those who were young or low paid—experienced modest negative employment effects, while natives faced little evidence of displacement. For wages, impacts were mixed: existing immigrants overall gained, but low-paid immigrants lost. The results suggest labour market adjustment operated through both substitution and complementarities across groups. More broadly, we provide a methodological framework for analysing the much larger and more diverse post-2021 immigration flows.

Keywords: wages; employment; immigration; Central and Eastern Europe; UK (search for similar items in EconPapers)
JEL-codes: C23 J22 (search for similar items in EconPapers)
Date: 2025-10
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