Migrants in the UK Labour Market: An Overview

This briefing provides data on migrants’ labour market integration and the jobs they do in the UK labour market. It also presents data on migrants’ employment and unemployment rates, occupational status, earnings, and contract types.

The foreign born made up an estimated 18% of the employed population (5.9 million) in the third quarter of 2021

The share of workers employed in the UK who were born abroad has steadily increased since 2004 (9.1% of the employed workforce in Q1 2004) to 2019 (Q1), when they represented 17.8% of the workforce. There have always been more non-EU born than EU-born workers, though this gap narrowed from 2004 to 2017 (Figure 1).

There is great uncertainty about how the migrant workforce has changed during the pandemic due to disruption to data collection (for a discussion of the effects of the pandemic on the migrant population estimates, see the Migration Observatory commentary Where did all the migrants go?). Provisional figures suggest that the number of EU-born workers in employment decreased from 2.5 to 2.3 million between Q1 2020 and Q1 2021, while the non-EU born working population remained relatively stable between the same period at 3.7 million (Figure 1).

Not all of the decrease in EU-born workers in 2020 resulted from EU migrants leaving the UK. There was also an increase in the number of unemployed EU migrant workers living in the UK, as discussed further below.

Figure 1

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Migrant men are more likely to be employed than UK-born men (83% vs 78% in 2020), but among women, migrants are less likely to be in employment (69% vs 72%)

There are many factors that shape the employment and unemployment rates of migrants in the UK, ranging from migrants’ varying levels of education and skills, how well they speak English, family and caring responsibilities, social networks, the extent to which UK employers recognise their foreign qualifications, and discrimination. More information about English language use among migrants is available in the Migration Observatory briefing, Language Use and Proficiency of Adult Migrants in the UK.

In 2020, the employment rate of working-age migrant men (83%) was higher to that of the UK born (78%) (Figure 2). Most region-of-origin groups had higher employment rates than UK-born men, except for men born in East and Southeast Asia (75%), and in MENA and Central Asia (69%). Among women, however, all of the region-of-origin groups had lower employment rates than UK-born women with the exception of women born in EU-8 countries.

Figure 2

The gender employment gap (the difference between the employment rates of men and women) is the smallest among the working-age population born in the UK (5%), EU-14 countries (7%), and East and Southeast Asia (8%). The gender employment gap is the largest among migrants born in Pakistan and other South Asian countries, for which women’s employment rate was 45 percentage points lower than that of men (Figure 2).

The unemployment rate of foreign-born men (5.2%) was similar to that of UK born men (5.0%) in 2020 (Figure 3). Men from EU-8 countries (3.1%) and India (3.2%), and East and Southeast Asia (3.9%) had lower unemployment rates than UK-born men, while Sub-Saharan African men had the highest unemployment rate in 2020 (7.6%). Foreign-born women had higher unemployment rates than UK born women (6.7% vs 3.8%), though this is mainly driven by the high level of unemployment among women born in Pakistan and other South Asian countries, excluding India (13.3%). The gender unemployment gap (7 percentage points) is also the largest among this group (Figure 3).

Figure 3

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Unemployment rates for both migrants and the UK born fell steadily from 2012 to early 2020, but it increased sharply among migrants over the course of 2020

Unemployment rates have generally risen and fallen following similar trends for both migrants and the UK born over the past decade, with sharp increases in the aftermath of the 2008 financial crisis and steady declines from 2012 to 2019 (Figure 4). The EU born had a lower unemployment rate than the UK born from 2008 until the beginning of the pandemic. Non-EU migrants have always had higher unemployment rates than their UK-born counterparts, although the gap has narrowed since the mid-2000s.

Due to the economic downturn in 2020 and the first half of 2021, unemployment rates increased for both UK-born and foreign-born workers until Q3 2021 (Figure 4). Among the EU born, the unemployment rate increased from 3.6% in Q1 2020 to 6.5% in Q1 2021, before going back down to 3.8% in Q3 2021. For the non-EU born, it increased from 5.2% to 6.7% during the same period and reached 6.8% in Q3 2021.

The greater increase in unemployment among migrant workers -especially the EU born- compared to the UK-born may be related to differences in the jobs they do. Migrants are over-represented in the hospitality sector, which has been hit hardly by the pandemic. Migrants are also more likely to be on non-permanent contracts (Office for National Statistics, 2021c). People with temporary contracts or less secure work arrangements have been more likely to lose their jobs during the pandemic (see the Migration Observatory report Migrants’ labour market profile and the health and economic impacts of the COVID-19 pandemic).

By Q3 (July-September) 2021, the unemployment rate for EU-born migrants had decreased substantially to 3.8%. By contrast, unemployment remained relatively high among the non-EU born at 6.8%. It is possible that the larger decrease in unemployment rate among the EU born compared to the non-EU born is related to the return migration of a larger number of unemployed EU workers during the pandemic.

Figure 4

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Non-EU born migrants who moved to the UK seeking asylum are more likely to be unemployed than those who moved for employment, family or study reasons

Non-EU migrants moving to the UK seeking asylum have a higher unemployment rate and a lower employment rate than other non-EU migrants (Figure 5). For example, the unemployment rate in 2020 among non-EU born migrants who moved to the UK seeking asylum was 14%, while among those moving for employment reasons their unemployment rate were 6%. Differences in health status, especially mental health, might be one of the factors that partly explain these gaps, according to recent research (Ruiz and Vargas-Silva, 2018).

Both EU-born and non-EU born migrants moving to the UK for family reasons tend to have lower employment rates and higher unemployment rates than those moving for work.

Figure 5

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In 2020, unemployed migrants were less likely to claim unemployment benefits (27%) than UK- born unemployed workers (36%)

The share of unemployed people claiming unemployment benefits (universal credit or job seekers allowance) increased sharply from 2019 to 2020 due to the coronavirus crisis (Figure 6) for both UK- born and foreign-born workers. The increase of unemployment benefit claimants was especially large among EU-born workers because they have been the hardest hit group in the coronavirus crisis. Even so, unemployed migrant workers were still less likely to claim unemployment benefits than UK-born workers during 2020. There are several possible reasons for pattern: firstly, migrant workers who are eligible to receive unemployment benefits may not understand their entitlements or may be unfamiliar with the process of claiming or visiting job centres. Secondly, some are not eligible: most non-EU citizens who are not yet permanently settled residents are ineligible for income-based jobseekers’ allowance and universal credit, as are EU citizens who moved to the UK after 31 December 2021 and do not have pre-settled or settled status. Finally, migrants from EU countries are also less likely to be unemployed for long periods of time (in 2020, 21% of UK-born and non-EU born migrants were unemployed for more than a year, but this percentage was 5 percentage points lower for the EU born).

Figure 6

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Workers born in India or EU-14 countries and are more likely to be in high skilled occupations than the UK born, while those born in new EU member states (EU-8 and EU-2) are more likely to be in low-skilled occupations

In 2020, the occupational distribution of migrant workers taken as a whole did not differ much from that of UK-born workers, although migrants were over-represented in jobs classified as low-skilled compared to the UK born (12% vs 9%) (Figure 7). In this context, job skills mainly indicate the educational credentials and training that are required to perform a job and do not consider other types of personal skills that are valued in the labour market. A majority of both migrants and UK-born workers were in middle-skilled jobs, which includes occupations such as associate professionals, administrative jobs, sales assistants and some care work.

There are considerable differences in the type of jobs that workers do by region of birth. In 2020, 48% of workers born in North America, Australia and New Zealand, and 47% of workers born in India were in high-skilled jobs, as well as 45% of those born in EU-14 countries. The most common high-skilled jobs among the migrant population are teachers, IT specialists, doctors and nurses, and managers. By contrast, workers born in new EU accession countries were over-represented in low-skilled occupations, such cleaners, waiters, or packers (Figure 7).

Figure 7

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Migrants are over-represented in the hospitality sector (28%), transport and storage (26%), and information, communication and IT (25%)

Figure 8 shows the distribution of workers born in different regions across different sectors of the economy, and the share of foreign-born workers in each economic sector.

About a quarter of workers born in East & Southeast Asia (23%) and in Sub-Saharan Africa (27%) work in the health and social work sector. Most Sub-Saharan African workers in this sector are carer workers (43% or 102,000). This share is much lower for other groups who are also over-represented in the health and social work industry, such as Indians (20% of the Indian-born work in the health and social work sector, but only 21% among those are carer workers).

Over a third of workers born in EU-8 countries were in retail and manufacturing jobs in 2020, which include jobs such as sales assistants, retail managers, marketing sales representative or transport drivers.

An estimated 18% of the employed workforce in 2020 were migrants. However, their presence varies considerably across economic sectors; for example, migrants were over-represented in the hospitality sector (28% of workers), in transport and storage (26%), in information, communication and IT (25%) or in health and social work (21%) (Figure 8). By contrast, foreign-born workers were under-represented in public administration (12%). EU-8 workers made up 2% of the working-age population in employment, but they represented 6% of workers in the hospitality sector. Indian workers are over-represented in the information and communication sector, which includes jobs such as computer programmers.

Figure 8

Figure 9 shows the top 10 occupations that are most reliant on workers born in EU and non-EU countries, respectively. Factory and machine operators have the largest share of EU-born workers (15% of workers were born in EU countries). Jobs such as machine operators in a food factory or assemblers are included in this occupational category. By contrast, health professional jobs, such as doctors and nurses, have the highest share of non-EU workers (18% of the total).

Figure 9

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Employees born in North America and Oceania (Australia and New Zealand) and India had the highest annualised median earnings in 2020 (£36,000)

Workers’ earnings are closely related to the occupations they hold, and data confirm that the migrant groups who are concentrated in high-skilled jobs also have higher earnings (Figure 10). Full-time employees aged 16 to 64 born in North America (US and Canada), Australia, New Zealand, and India had the highest median earnings at £36,200 per year compared to £28,600 of the UK born. By contrast, full-time employees born in new EU member states had the lowest median earnings (£25,000), followed by those born Pakistan and other South Asian countries, excluding India (£27,000) (Figure 10). Employees born in post-2004 EU countries also had the lowest earnings dispersion of all the foreign born; that is, the difference in earnings between workers the 25^th and 75^th percentile of the earnings distribution is the smallest. The lower variability in earnings among EU-2 and EU-8 workers is likely to be related to their more homogenous occupational profile compared to other migrant groups.

Figure 10

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Around half of highly educated workers born in new EU member states were in low and medium-low skilled jobs in 2020

Compared to the UK born, migrants are more likely to work in jobs for which they are overqualified, especially if they have foreign qualifications (Chiswick and Miller, 2008). In general, workers are considered overqualified for their jobs if their educational level is above that required for their jobs.

Some of the factors explaining migrants’ high over-qualification rates include the lack of UK-specific skills, employers’ mistrust of or unfamiliarity with foreign qualifications, or migrants’ lack of information about the job searching process in the UK.

The indicator of over-qualification used here shows the share of highly educated workers (those with university degrees or with higher education qualifications below degree level, such as nursing) in low and medium-low skilled jobs (Figure 11). In 2020, the share of over-qualified workers was higher among people born in EU-8 countries (47%), Romania and Bulgaria (41%) and in Pakistan and other South Asian countries (35%), than among the UK born (22%) or the EU-14 born (16%) (Figure 11). Importantly, the migrant groups with the lowest earnings (see Figure 10) were also the ones most likely to be over-qualified for their jobs.

Figure 11

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In 2020, the share of workers in part-time jobs because they could not find a full-time position was 8% for those born in Pakistan and other South Asian countries excluding India, and 3% for UK born workers

The share of workers who were in part-time jobs in 2020 because they could not find a full-time job was relatively low for both the UK born (3%) and the foreign born (4%) (Figure 12). However, the share of involuntary part-time workers was higher for those born in Pakistan and other South Asian countries (8%).

Figure 12

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Foreign-born workers were more likely to work during night shifts and in non-permanent jobs than the UK born

Shift work is work that takes place outside typical working hours (9 to 5) from Monday to Friday. It could involve working on different time schedules each day of the week, on weekends, on split shifts (e.g. full shifts divided into two distinct parts with a gap of several hours in between) or during night time. Shift schedules are more common in sectors that require 24-hour service (e.g. nursing and care homes) or where service is concentrated at certain times of the day (e.g. restaurants, night clubs). In 2020, an estimated 23% of foreign-born workers have jobs involving some kind of shift work, compared to 18% of the UK born.

Night shift work is thought to have a negative impact on physical and mental health and performance through its impact on sleep and circadian timing (The Parliamentary Office of Science and Technology, 2018). Foreign born workers were more likely to work during night shifts (7%) than the UK born (5%) (Figure 13).

In 2020, migrant workers were also more likely to be in non-permanent jobs (7%), especially those born in Romania and Bulgaria (8%) or Pakistan and other South Asian countries (8%) compared to the UK born (5%). The share of workers in zero-hour jobs is relatively small but is more common among the non-EU born (4%) than the UK born (3%). Around half of workers in zero-hour contracts work in cleaning, warehousing, social care and childcare jobs.

Figure 13

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Evidence gaps and limitations

The LFS does not collect data on earnings from self-employment, so cannot provide the full picture of migrants’ earnings in the UK. In addition, the estimation of annualised median earnings for each country grouping does not exactly match the official estimates, which are based on the Annual Survey of Hours and Earnings (see ‘Understanding the Evidence’ above).

The aggregate occupational categories used in this briefing (e.g. ‘high-skilled’ or ‘low-skilled’) are also imperfect as a measure of occupational skills. While using aggregated occupational groups is useful for providing an overview of the skills required to perform a certain job, in practice they can contain a wide range of occupations including workers with quite different levels of education, pay or working conditions.

A limitation of using cross-sectional data such as the LFS/APS is that we cannot follow individuals over time and, therefore, we do not know whether migrants’ labour market position has improved or worsened since their arrival to the UK. In general, migrants’ integration in the labour market is likely to improve the longer they stay in the UK.

Acknowledgements

This report was originally produced with the support of the Paul Hamlyn Foundation. It was updated in 2022 with the support of Trust for London.

This work was produced using statistical data from ONS. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.

References

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• Office for National Statistics (2021c). Coronavirus and the impact on payroll employment: experimental analysis. Available online
• Office for National Statistics (2020). Coronavirus and its impact on the Labour Force Survey. Published on 13 October 2020. Available online
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• Parliamentary Office of Science & Technology (2018). Shift work, sleep and health, number 586. Available online
• Ruiz, I., & Vargas‐Silva, C. (2017). Are refugees’ labour market outcomes different from those of other migrants? Evidence from the United Kingdom in the 2005–2007 period. Population, Space and Place, 23(6). Available online
• Ruiz, I., & Vargas‐Silva, C. (2018) Differences in labour market outcomes between natives, refugees and other migrants in the UK, Journal of Economic Geography, volume 18, Issue 4, pp 855–885. Available online
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Further readings

• Anderson, B., & Ruhs, M. (2012). Reliance on migrant labour: inevitability or policy choice?. The Journal of Poverty and Social Justice, 20(1), 23
• Chiswick, B. R., & Miller, P. W. (2008). Why is the payoff to schooling smaller for immigrants?. Labour Economics, 15(6), 1317-1340.
• Frattini, T. (2017). Evaluating the Labour Market Integration of New Immigrants in the UK. Social Policy and Society, 16(4), 645-658.
• Johnston, R., Khattab, N., & Manley, D. (2015). East versus West? Over-qualification and earnings among the UK’s European migrants. Journal of Ethnic and Migration Studies, 41(2), 196-218
• McCollum, D., & Findlay, A. (2015). ‘Flexible’workers for ‘flexible’jobs? The labour market function of A8 migrant labour in the UK. Work, employment and society, 29(3), 427-443
• Migration Advisory Committee. (2014). Migrants in low-skilled work: The growth of EU and non-EU labour in low-skilled jobs and its impact on the UK. Migration Advisory Committee Report