The document discusses the role of migrant workers in addressing labor shortages across high-income countries (HICs), exploring immigration policies, their aims, constraints, and variations in regulation. It highlights the complexities of linking migrant labor to domestic market needs, addressing questions of selection, rights, and the social implications of immigration policies. The analysis includes insights from the UK's Migration Advisory Committee, emphasizing the dependence on migrant labor and the challenges in defining skills and shortages.

1. Who needs migrant workers?
Labour shortages, immigration and
public policy
Martin Ruhs
Migration Observatory, COMPAS,
University of Oxford

2. Overview
Part 1 - Labour immigration policies in HICs:
aims, constraints, variable national policy spaces
Part 2 – Key features of labour immigration
policies in HICs
Part 3 – The policy question: how can we link
immigration to the “needs” of the domestic
labour market and economy?
Part 4 – Discussion: What role for supra-national
policies?

3. 3 core questions of labour immigration
policy
How to regulate:
1) Numbers (e.g. employer-led, quotas, fees, etc.)
2) Selection (e.g. by skill, nationality – points
based systems; bilateral agreements)
3) Rights (e.g. temporary or permanent; access to
labour market; access to welfare state; family
reunion; access to citizenship)

4. Labour immigration policy: aims and constraints
Defining the “national interest” (objectives):
• economic efficiency (e.g. growth; competitiveness;
fiscal ef)
• distribution (e.g. protect lowest paid; and others?)
• national identity and social cohesion (what is it?)
• public order and national security
Constraints and variations:
• state capacity to control immigration
• the „liberal constraint‟: dom. liberal institutions; int.
commit.
• Inst. variations: polit. systems, prod. regimes, welfare

5. Choice under constraints
• States decide on openness, selection and
rights based on objectives (variable) and
constraints (variable; binding in short term)
• Variations and constraints define and
circumscribe the “policy space” for the
regulation of labour immigration at national
level
 Variation across countries and over time

6. 1. TMPs predominate
2. PMPs limited to high skilled
6

7. 3. Openness positively related to skill level
targeted (H1)
0.72
0.7
Openness index
0.68
0.66
0.64
0.62
0.6
All (104 programmes) Upper HICs only (71 programmes)
7

8. Regulating Openness
Quota:
• existence, type and size of quota
Demand restrictions:
• job offer; labour market test; limited
occupations/sectors; economic fee;
conditions of employment; trade union
involvement
Supply restrictions
• nationality and age; gender and marital
status; skills requirements; host country
language skills; self-sufficiency
8

9. 4. Modes of immigration control by VoC
Quota
1
Self-suff Job offer
0.75
Language 0.5 LMT
0.25
Skills 0 Sec/occ
Gen/ms Fees
Nat/age Conditions
T. Union
liberal (22) coordinated (19) mixed (15)
9

10. 5. Variation in restrictions
across different rights
(all programmes , 2009)
10

11. 6. Rights restrictions inversely related to targeted skills
(H2) , all programmes , 2009)
11

12. The policy question: how to
link labour immigration to the “needs” of
the domestic labour market and economy

13. 13

14. What and whose “needs”?
Two approaches:
1. Human capital approach: admission often
without a job offer
2. Shortage approach: linking the admission of
new migrant workers to the “needs” of the
domestic labour market
Are migrant workers needed to “fill labour and
skills shortages” and “to do the jobs that local
workers cannot or will not do”?

16. cap threatens the firms were considering moving jobs
economic abroad because they could not
recruit the staff they needed
recovery and BBC, 21.09.10
Britain’s ability
to attract foreign A cap on migrant workers
investment will hurt London’s
economy
PwC warned that businesses were "struggling to
operate"
Telegraph, 24.11.10 immigrants made
immigration cap on non-EU workers
will do nothing but create skills
a "substantial
shortages for important industries in net contribution
the UK to the UK fiscal
Telegraph, 24.11.10 system"
Independent, 24.7.09
Farm migrants 'vital' in east
England
16

17. The problem with “skills” and “shortage”
Skills:
• Conceptually and empirically ambiguous
• Credentialised vs non-credentialised;
experience; “hard skills” vs “softs skills”
• Demand for employees with specific
personal characteristics and “attitudes”
(good “work ethic”; “compliant” and
“cooperative”)
Shortages:
– No universal definition? Demand for more
workers at prevailing wages?
– Why not let wages rise? 17

18. Identifying shortages using labour market
data
• Common measures
– Change in wages, employment,
unemployment, etc.
– Vacancy rates, hard-to-fill vacancies, SSVs
etc.
• US Bureau of Labour Statistics (1999)
– Employment growth at least 50% faster than
average
– Wage increases at least 30 percent faster than
average
– Unemployment rate at least 30% lower than
average
• UK‟s Migration Advisory Committee (MAC) 18

19. MAC “top-down” indicators of
shortages of pharmacists
19

20. Alternatives to immigration
• Alternatives
– Increase wages, improve working conditions;
training
– make production process less labour intensive
– relocate to countries where labour costs are lower;
– switch to production (provision) of less labour-
intensive commodities and services;
• How do employers decide?
– Relative cost matters
– Path dependence ….. no going back?

21. 21

22. “System effects”: how public policies
create demand for migrant labour
• e.g. construction in UK
– Fragmented industry; low levels of labour market
regulation; temporary, project-based labour;
casualised employment; no comprehensive
vocational education and training system
• e.g. social care in UK
– Publically funded and privately provided
– Councils budgets have kept wages low
– Demand for low-wage flexible workers

23. Migrants in employment in the UK
23

24. Growing reliance on migrant labour:
choice or inevitability?
• Demand for migrant labour arises from broad range of
public policies and institutions that go beyond
immigration policy
• Immigration and public policy: mind the gap
24

25. The UK’s Migration Advisory
Committee (MAC)
• Established by Labour Government in 2007,
retained under current Cons-Lib Dem Coalition
Government
• Independent committee of 5 academic economists,
supported by secretariat
• Advises Home Secretary on labour immigration
policy
• Advice public but non-binding
• Shortage occupation list: “skilled”, “shortage”,
“sensible” 25

26. Discussion:
Harmonising labour immigration policies
across EU countries:
- what
- why
- how
starting point: default is national regulation:
what is the case for supranational regulation?

27. More information and analysis at:
www.migrationobservatory.ox.ac.uk
Contact:
martin.ruhs@compas.ox.ac.uk
migrationobservatory@compas.ox.ac.uk