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Impact of Migration on Ireland

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How has the migration affected the Irish economy?

Introduction, history and background of migrants

Migration has been an inevitable part of human life since ever whether it was of economic, political or other nature. In Ireland, the number of migrants is very high in comparison with many European countries as the Irish labour market is very open to international migrants. Migration flows have always been a crucial part of the Irish economy for its diversification, and Ireland has been very sensitive to changes in migration flow. There were some decades when the Irish economy was not prosperous, and the country suffered from such as things as famine or civil wars which ended in a big part of economy emigrating especially to the United States.

Around 1950s emigration had a great impact on Ireland as many young and skilled people decided to emigrate from which the Irish economy suffered. After about twenty years, some of these emigrates started to return and brought experiences, which boosted the economy in the 1970s as seen from the graph. In 1973, Ireland also joined the European Union and accepting 12 new European countries into the European Union in 2004, also allowed them to migrate into Ireland easier. Technologies have also had an enormous impact on migration. With social networks, it is easy to communicate with people anywhere in the world.

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The country’s economy started to develop and therefore attract foreigners. Throughout the 1990s, Ireland experienced an economic boom. New job positions were created, the country started to be appealing to foreign investors, the unemployment rate went down, and the population went up because of the immigrants. It was not attractive for high-skilled migrants only, but it was also necessary for the country to employ low-skilled workers for jobs such as working on farms. This remains a fact even nowadays as these jobs are usually done by people from countries with the lower average wage for the work in their country than in Ireland.

Nowadays, with the ageing population in the whole European Union and globalisation, it is impossible to rely only on the domestic market to provide all the labour force. Migrants coming into the country for work fill the gaps in the labour market. Entrepreneurs create new jobs, highly educated workers contribute to innovations. They increase the demand after work and allow companies to hire more people.

In this essay, I will look at the impact of emigration and immigration on Ireland. Although Ireland has a high number of immigrants, it also has about the same number of people emigrating. As of April 2017, 84,600 immigrated, and 64,800 emigrated. The population in Ireland was 4,792,500. An important indicator of Ireland attracting more immigrants is that population increased by 52,900 from 2016 with the number of immigrants risen by 2,8%. Higher numbers of immigrants were only attained in 2007 and 2006 during the economic boom and fell during the Great Recession. The number of people emigrating decreased by 1,400, and it contributed to positive net migration. As it can be seen from this graph migration is strongly affected by current economic or political conditions in the world.

In 2016, there were 802,1000 non-Irish nationals. There were 12 countries whose residents lived in Ireland with a figure higher than ten thousand. The biggest share had the UK with immigrants, followed by Poland with and Lithuania. When it comes the education level of immigrants to Ireland, regardless of sex and nationality, 48.6% had third level education and 16.8% had higher secondary education and below in 2017. A highly skilled immigrant coming to work in Ireland must have a job offer 60,000 annually. These occupations include engineers, doctors, IT specialists, marketing specialists, or other scientific, economic and IT professions. When new member states entered the EU, we can see an increase and then a sharp fall during the crisis in 2008. However, high-skilled people from other European countries were not so hit by the crisis.

When it comes to emigrants, they are likely to be young and skilled and emigrate to EU 15. However, when there is a high amount of highly-skilled workers, there is „brain exchange“ between countries.

Impact on the labour market

As already mentioned, migrants are an essential component of the country’s economy as they fill the gaps in the domestic market (whether it is a need for experts or low-skilled). Unemployment and migration are narrowly connected. As it could be seen, the number of workers rapidly decreased after the crisis as the unemployment rate was high. High-skilled migrant workers increase productivity, bring diversity and know-how and low-skilled workers carry out a task which natives would not. Migrants are also usually young. Therefore they reduce the age profile and with the ageing population, this is an essential factor.

The high outflow of natives with high-education can negatively impact domestic companies which have limited ability to hire international workers. There is also evidence that immigrants have just a little negative impact on the wages of natives. In fact, they may have a positive impact on the average wage, because gains outweigh thegainsm at higher wages. During the 2000s when Ireland was experienced an increase in the number of migrants, the average wage also increased. But these are effects rather caused by policy than migration itself. However, these are effects instead caused by policy than migration itself. The impact on wages may also vary across regions or depend on the skill and education background. The difference in wages is most significant when it competes with natives wages. The views on this matter vary, but in general, migrants do not increase unemployment, neither they affect wages very much.

If we applied Borjas‘ findings it could be said that if we used education as a base for our skill cells, it had a negaive impact on wages, and positive, if we applied occupation as a base. However, this is misleading as we also need to take into account other factors, such as age, complementarity or substitution.

Impact on public finances

There is also no evidence that non-Irish would benefit from jobseeker payments more than Irish. They are typically young and skilled, however, in the long run, they may use public finances more (the older they get, the more health care they need) but on the other hand it can also have positive effects (when they are settled they can have children who in the future will work, pay taxes).

Impact on infrastructure

Affordable housing is an essential factor in attracting migrants into Ireland. High prices can discourage potential migrants who can discourage the economy. However, migrants also influence the demand for rental proprieties, especially in Dublin, which can also lead to congestion and a worse environment. On the other hand, if treated right it helps to improve public transportation. When it comes to education, migration flow has an impact on it, as for many children English is not an official language, and this raises a challenge especially for disadvantaged schools. On the other hand, diversity helps the education to learn new languages or to learn about new cultures. It could be also argued that if the migrants are concentrated at one place, especially in cities, this can have a negative impact on the environment and transport. However, if the government treats this situation right, then it can lead to a positive impact on the public transport.

What about other impacts?

Studies have shown that emigration from the country can have a negative psychological impact on the family left behind, especially mothers. Also, people who immigrate tend to be less happy than the natives. Immigrants and returned migrants bring diversification to the country.

What about the impact of Brexit on Ireland migration?

Out of all countries in Europe, the impact of Brexit is predicted to be the greatest. Northern Ireland and Ireland share about 500km long border with 275 passages. Daily, thousands of people travel through to work. Even some part of products from Northern Ireland is processed in Ireland, and vice versa, including beer Guinness. All people born in Northern Ireland have the right to have Irish nationality, therefore European. In April, it was announced that border controls are undesirable. Therefore, some Northern Ireland-born might decide to have Irish nationality, which will increase its population, which will have a positive impact. However, it might influence the border area negatively, as it is not a long time ago there was a Civil War, and the peace remains fragile. When it comes to the migration from the rest of the world, Ireland is likely to experience many immigrants coming into the country if the conditions in the UK will not be attractive for them because of its geographical conditions.

The Roy Model

Skill flow to where they get the highest return. If immigrants have above average skills, the flow is positively selected, negatively if below. Ireland and Poland are excellent examples of this. When it comes to the negative selection, as of 2018, the average wage for a low-skilled housekeeper varies around 9.5 euros per hour in Ireland, while in Poland it is around 4 euros per hour; therefore they migrate to Ireland. In the positive selection. The return to skills is higher in Poland.

High-skilled workers usually come from European countries like France, Italy, but also from Asia. A big part of Filipinos, especially women, are employed in healthcare. Immigrants from these countries do relatively better in Ireland than in their home countries.

Pros

  • Brings variety in lifestyle especially in big cities– culture, religion, opportunities;
  • A big part of immigrants (or return migrants) are well-educated which brings innovations and helps the economy to thrive, lowers the unemployment rate;
  • Helps with education – learning new languages, about culture;
  • Low-skilled migrants carry out jobs, which natives would not;
  • Fill gaps in the labour market.

Cons

  • Immigrants tend to be less happy, so do families left behind;
  • Pressure on infrastructure – higher rental prices (in the centre of Dublin);
  • Difficulties with education for disabled children who have language barriers;
  • If concentrated at one place, they may worsen the environment.

Migration will remain an essential component in Ireland’s policy, and it is vital to preserve it. In the past, the views on migrants were more positive than negative, which is not true as of today. Therefore, the country should encourage return migration and immigration into Ireland and the companies should bring more diversity into them. Today there are multiple programmes which help immigrants to integrate such as Start-Up Entrepreneur Programme. For high-skilled workers the presence of multinational companies such as Google or IBM is essential. However, as mentioned before, it is crucial to attract them also by affordable housing or good education and healthcare. A strategy to increase the number of international students and improve globalisation was accepted in 2016. Ireland also faces intense competition from other English-speaking countries such as Australia which also attract migrants with integration programmes. Although there are some cons, overall the impact of migration on Ireland remains positive, as it can also be seen in the history.

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