Immigration and Self-Reported Well-Being in the UK

Abstract

Much recent research suggests that immigration has had little, if any, negative impact on the labour market outcomes of natives. In this study we focus on ascertaining the effect of immigration on subjective as opposed to objective indicators of native well-being. Our analytical approach exploits spatial and temporal variation in the net inflows of foreign-born individuals across local areas in England. We find using both a fixed effects and instrumental variable specification that net inflows of foreign-born individuals are associated with modest negative subjective well-being effects for the population as a whole, but that there is a notable degree of heterogeneity in this relationship. Specifically, relatively older individuals (60 ), those with below average household incomes, the unemployed and finally those without any formal educational qualifications experience much more pronounced well-being losses than their younger, financially better-off and employed counterparts. These observed well-being differentials across social groups are similar to voting patterns evident in the recent UK referendum on EU membership. We put forward perceived labour market competition as one of the mechanisms underpinning these results. In support of this premise, we find that the negative relationship between inflows of foreign-born individuals and the subjective well-being of the native-born population in England is much more substantive when macroeconomic conditions are relatively less favourable.