ON THE CAUSES OF BREXIT: How migration from Eastern Europe contributed to the rise of UK Euroscepticism

Migration from Eastern Europe contributed to the growth of UK scepticism about the European Union (EU) as measured by electoral support for the UK Independence Party (UKIP) between 1999 and 2014.

Low skilled migration from Eastern Europe affected areas of the UK that had had limited prior exposure to EU migration, putting pressure on public goods, housing and services at a time when fiscal pressures were constraining their expansion, and being associated with adverse effects on labour market outcomes, mainly affecting those at the bottom end of skill distribution. Yet the estimated effects are small: given their size, it''s unlikely that the referendum result would have been overturned with considerably less immigration.

These are the central findings of research by Sascha Becker and Thiemo Fetzer, to be presented at the Royal Economic Society''s annual conference at the University of Bristol in April 2017.

They note that a great deal of the EU referendum debate was concentrated on a single EU-related issue: uncontrolled migration especially after the 2004 EU enlargement to Eastern Europe.

But free movement of labour is a right enshrined in the DNA of the EU, and the UK government boldly embraced it in 2004 following EU enlargement: while most continental European countries successfully lobbied for phasing in the common market''s free movement of labour, the UK was among the few countries to permit access to its labour market to East Europeans from day one. Austria and Germany, in contrast, only opened their labour markets to migrants from Eastern Europe seven years after the EU enlargement.

A 2003 study commissioned by the Home Office computed different scenarios of expected migrant numbers from Eastern Europe to the UK under the assumption that other big EU countries, in particular Germany, would open up their borders as well, which was the proclaimed policy at the time the report was written.

The UK government and commentators ignored this important assumption, which did not reflect political realities in early 2004. The headline figure of ''only around 5,000-13,000 East Europeans to arrive to the United Kingdom per year'' under this selected scenario was used by politicians to justify the UK''s decision to allow free movement of East Europeans from 1 May 2004.

Migration into the UK from Eastern Europe picked up markedly after 2004. At least
850,000 people (around 3% of the 2001 UK working age population) migrated from Eastern Europe to the UK between 2004 and 2011. This study by Becker and Fetzer shows that places that received large numbers of migrants from Eastern Europe saw increases in anti-European sentiment after 2004, proxied by vote shares for UKIP in elections to the European Parliament from 1999 to 2014.

Elections to the European Parliament are the only elections that allow a consistent mapping of political preferences over time in the UK. This is different from UK national elections due to very frequent electoral boundary changes for Westminster constituencies and due to the fact that voters have incentives to cast votes strategically because of the first past the post electoral system.

A related study by Becker, Fetzer and Dennis Novy shows that support for UKIP translates nearly one-to-one into leave votes in the EU referendum, making the evolution of UKIP vote shares over time an important window into understanding how political preferences shifted in the run-up to the 2016 EU referendum (see Figure 1).

The study exploits the 2004 EU enlargement to Eastern Europe as a natural experiment providing variation in the exposure of local authority districts to EU migration. The findings suggest that the anti-EU party UKIP gained considerable support in areas that received a lot of migrants from Eastern Europe.

Voters shifted away from pro-European parties towards anti-EU parties. The rise of UKIP in the European Parliament also gave the party more influence in domestic politics and put the two-party political system in the UK under strain. The challenge arising from UKIP is seen as having contributed to David Cameron being pushed by his own Conservative Party to call for a referendum in the first place.

The results highlight that migration from Eastern Europe was distinct to past migration from Europe: migrants that arrived after 2004 from Eastern Europe were predominantly low skilled and settled in areas that saw little previous EU migration (see Figures 2 and 3).

For example, East Europeans that arrived prior to EU accession predominantly moved to London (around 60%), which indicates that they were more likely to serve the higher average skill London labour market. Of the East European migrants arriving after 2004, only a minority moved to London (28%), while the vast remainder moved to less affluent areas with limited prior exposure of migration from Eastern Europe.

This distinct change in the patterns of migration contributed to the growth of anti-EU sentiment. Low skilled migrants put strain on UK''s housing market and the public sector.

Furthermore, migration from Eastern Europe affected labour market outcomes. Wages at the bottom end of the earnings distribution grew disproportionately less in areas that saw in-migration from Eastern Europe.

East Europeans were mainly absorbed in low skill routine- and manufacturing sector jobs, competing with British nationals, which may have adversely affected labour market outcomes of British nationals: relative to British nationals in living in areas with less in-migration from Eastern Europe, rates of long-term unemployment among British residents increased.

Does Migration Cause Extreme Voting? – Sascha Becker (University of Warwick) and Thiemo Fetzer (University of Warwick/University of Chicago, Harris School)


CAGE Working Paper 306 (October 2016)

See also:
Who Voted for Brexit? A Comprehensive District-Level Analysis
Sascha Becker, Thiemo Fetzer and Dennis Novy
CAGE Working Paper 305 (October 2016)