01 September 2017

LSE: Is EU talent being chased away from the UK by Brexit?

Authors of the analysis find support for the view that Brexit has reduced the attractiveness of the UK for recent high-skilled graduates from the EU, but it is far from clear whether the magnitude of this decline will have a significant lasting effect on the UK economy.

[...]Data from the UK National Statistics Office reveal a slight overall decline in immigration from the EU27 (EU member states excluding the UK) over the last quarters of 2016 and a marked rise of emigration of EU citizens from the UK. There are several reasons why EU citizens, both low- and high-skilled, might be less inclined to seek employment in the UK in the wake of Brexit:

1. The feeling of no longer being welcome in the country.
2. Concerns about the performance of the UK economy, e.g. relocation of business activity to the EU27.
3. Losses in (home country) purchasing power of retained earnings due to unfavourable exchange rate movements.
4. Potentially restricted access to social rights in future, including, among other things, the right to long-term residency, access to social benefits, family reunification rights and the exportability of pensions claims.

The above-mentioned stories of labour shortages are concentrated in low- and medium-skill professions. Granted, some high-skilled sectors had also experienced shortages prior to the referendum and competition to recruit international talent was intense. But the question arises to what extent have high-skilled workers changed their attitude towards the UK as an attractive destination for work?

Data from the business-networking website LinkedIn may provide some answers to migration questions, just as it has done in the past (see our previous analyses here and here). LinkedIn features advertisements for job openings and it is possible to track the number of persons living in the EU, for example, who have browsed through UK vacancies on its website. Figure 1 shows the share of those adverts that EU27 citizens clicked on which were from the UK, as a share of all clicked on ads (domestic job listings are excluded from this calculation). We only looked at the behaviour of recent graduates – that is, individuals who had graduated within the previous year – from the EU27 since they are more likely to be willing to move across borders to find a job, and because they are likely to be on LinkedIn. [...]

The authors' interpretation of LinkedIn data supports the view that Brexit has reduced the attractiveness of the UK for recent high-skilled graduates from the EU. It is far from clear, however, that the magnitude of this decline is sufficiently great to significantly affect the UK’s ability to recruit high-skilled individuals or to have a large impact on the aggregate real economy. Of course, this does not change the fact that for individuals directly affected by the Brexit negotiations – whether UK or non-UK citizens – a swift agreement on the future arrangement of mutual rights would allow for more certainty to plan their future, whether in or out of the EU.

Full data on LSE blog EUROPP

 

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