After Brexit: Net migration, unemployment and job vacancies

Summary of the report’s forecasts

Forecast 1: Our central forecast based on estimates of unemployment trends

• Net migration will be substantially lower than it would have been in the event of a Remain vote because of the UK’s negative economic outlook. Net migration will fall to 162,000 by 2018 and 131,000 in 2020.
• Note that these forecasts don’t take into account actual policy changes on migration – such as the possibility of stricter immigration rules in the event of leaving the EU. Instead they only consider how migration tends to fall when unemployment rises. If the Conservatives implement strict immigration policies these numbers could be much lower.

Forecast 2: Based on a more pessimistic economic outlook where the UK leaves the Single Market entirely

• Under this forecast the falls in net migration are even greater, to 130,000 in 2018 and to 99,000 in 2020.
• Under this forecast the Conservatives would hit their net migration target in 2020.
• This would, however, come at a substantial economic cost.

Forecast 3: Based on early post-referendum figures on the impact of the Leave vote on job vacancies

• Net migration could fall 58% by next year.
• The Conservatives would hit their net migration target even earlier, by 2019, but at a large economic cost.

Key points from the report

• Immigration is a hugely salient issue politically. Evidence suggests it was a key driver of the Leave vote in the referendum.
• Net migration to the UK has been high by historical standards. David Cameron promised to reduce migration to the tens of thousands, a target the Conservatives consistently failed to meet. Some commentators have suggested this failure contributed toward the Leave vote in the referendum and ultimately Cameron’s resignation.
• Most economic projections suggest a difficult time for the UK in the wake of the Leave vote, leading to reduced economic output. This is likely to mean higher unemployment and lower job vacancies than would have been the case had the vote been to Remain.
• But unemployment and job vacancies are strongly correlated with net migration, and so this may also affect net migration levels.
• This means Theresa May could face an easier task in reducing net migration numbers than David Cameron did.
• We estimate net migration levels between 2016 and 2020 based on likely trends in unemployment and job vacancies.