Economic Assimilation of Pre- and Post-2004 EU Enlargement Immigrants to the UK
Drawing from longitudinal studies that have been conducted in many other countries but never before in the British context (with the exception of descriptive studies employing data from the Lifelong Labour Market Database, such as Dickens and McKnight (2008) and Lemos (2013)), I intend to test the Immigrant Assimilation Hypothesis for both earnings and employment probability. In addition, I look to test whether the compositional changes caused by the extension of the European Union to the A8 countries in 2004, expansion which many opponents claimed would lower the quality of immigrants, also imply a greater gap at entry and lower assimilation rates (reconcilable with lower human capital on average) among more recent immigrants. First, I find that the average immigrant experiences an earnings gap at entry of around 32%, which he bridges in over two decades - at a rate in excess of 2%. I find no evidence of differing rates of earnings assimilation between pre- and post-Accession immigrants: instead, heterogeneity (both in terms of gap at entry and assimilation rate) is very significant across regions of origin, with Asian and Latin American immigrants experiencing the highest entry deficit and not converging to native earnings. Additionally, pre-migration experience is found not to be significantly rewarded on the British labour market. Secondly, I consider assimilation in the probability of employment: I find no entry deficit in such probability for immigrants in general (independent of period of arrival), and thus no convergence over time. Employment probability is however increasing in pre-migration experience much more than it is in British experience. There is then an asymmetry in pre-migration experience importance for employment and earnings, hinting that the portability of human capital is partial at best. I believe there is some connection between this finding and the established finding of immigrant educational over-qualification, but this needs further investigation. Ultimately, the dissertation tries to move a step forward towards the creation of a common framework for testing assimilation, which is still latent 17 years after Borjas, in Chapter 28 of the Handbook of Labor Economics, lamented the lack of a common ground in migrant performance studies - lack that makes results from seemingly similar studies impossible to compare. Moreover, the number of assimilation studies for Great Britain is undeniably too low for a country that attaches such great importance to the debate over migration: this is the result of the difficulty of accessing British labour longitudinal data rather than the lack of academic interest. Easier access to administrative data could pave the way to more representative and potentially less problematic (as such administrative data do not present the problems associated with survey data) studies.