How can the two be squared?
Posted: Thu Feb 06, 2025 3:38 am
While more recent non-EU entrants have experienced faster earnings progression, the relative earnings of non-EU employees overall fell between 2021 and 2023 (Figure below – Monthly median earnings). Whereas our data look at each cohort separately, the overall picture is dependent on the size of each cohort. In other words, since iran rcs data non-EU migrants earn considerably less when they first enter the labour market, the overall earnings of non-EU employees will be lower when there are more new entrants, as was the case in 2022 and 2023.
This is a compositional effect; it does not indicate that new entrants in this period were earning relatively less than new entrants in most of the pre-pandemic period. Indeed, our data suggest this was not the case, at least in the first 0-1 years after arrival. Whether this persists will depend both on earnings growth and on attrition (i.e. how many low earners leave the UK over the coming years).
Focusing on the very large cohorts of new non-EU entrants in 2022 and 2023, their relative earnings are very similar to that of the 2021 cohort, and higher than in most of the pre-pandemic period. Given the changes to the migration system, and the resulting very large increase in the number of new entrants, this stability is perhaps surprising.
This is a compositional effect; it does not indicate that new entrants in this period were earning relatively less than new entrants in most of the pre-pandemic period. Indeed, our data suggest this was not the case, at least in the first 0-1 years after arrival. Whether this persists will depend both on earnings growth and on attrition (i.e. how many low earners leave the UK over the coming years).
Focusing on the very large cohorts of new non-EU entrants in 2022 and 2023, their relative earnings are very similar to that of the 2021 cohort, and higher than in most of the pre-pandemic period. Given the changes to the migration system, and the resulting very large increase in the number of new entrants, this stability is perhaps surprising.