Response To House Of Commons Library Blog On Our Paper On Economic Characteristics Of Migrants In The Uk


Economics, Employment, European Union, Welfare Benefits

Steven Ayres, a researcher at the House of Commons has blogged on our report “Economic characteristics of migrants in the UK in 2014”.
His blog starts by noting that its purpose is not to critique “the report itself, but rather to investigate whether the source of the data, the Labour Force Survey (LFS), is capable of providing evidence that is robust enough to support these claims”.
He then focuses on the final section of the report only. This showed the LFS data broken by age-band and by country group to examine possible reasons for differing rates of benefit claim overall.  This section was clearly introduced with a cautionary note about some of the benefits involved and its purpose is to observe general differences across the age distribution.
Mr Ayres reproduces the chart showing housing benefit by age for people born in Pakistan and Bangladesh and writes “One particular claim is that there is a 10 point gap in the claimant rate between UK-born and Pakistan/Bangladesh born 40-44 year old housing benefit claimants” and then points out that any such assertion cannot be made with much statistical confidence. He is quite correct, but our report made no such claim. Instead, the commentary on the chart said merely “Rates of housing benefit claim are considerably greater than the UK-born rate for those aged 30 and over“. For someone writing with the ostensible authority given by its appearance on the House Of Commons website, it is disappointing that Mr Ayres has set up a straw man in saying explicitly that a particular claim was made when it simply was not.
Mr Ayres then draws attention to a passage in the LFS User Guide that says
Comparison between the data collected by the LFS and administrative data collected by other Government departments shows that the LFS consistently undercounts benefit claimants.
It is correct that this is what the User Guide says. Mr Ayres then goes beyond this in writing “The LFS has shortcomings as a source of benefit claimant data due to discrepancies (which can be substantial) between individual respondents’ descriptions of the benefits and tax credit they receive and the official DWP / HMRC figures on benefit and tax credit claimants drawn from administrative databases”.  Taking the closest published administrative data gives the following comparison to the Apr-Jun 2014 LFS data. We will leave it to readers to decide just how substantial the differences actually are.
  Jobseeker’s Allowance Child Benefit Tax Credits Housing benefit
Labour Force Survey 1m

 

7.7m 4.8m 3.9m (age under 70)
Administrative data 1.1m 7.6m 4.7m 3.5m (age under 60)
(Admin source) ONS claimant count statistics Apr-Jun 2014 avge HMRC

published for 2013

HMRC published

for April 2014

DWP published for 2013/14
Mr Ayres further notes that some of the explanation for higher rates of benefit claim among some country groups might be because they live in London, and suggests that this ‘omitted variable’ might be the ‘causal factor’ for higher rates. We have no doubt that a reason that some groups have high rates of housing benefit claim is because they live in high-cost London (although the Somali-born people singled out by Mr Ayres overwhelming live in social housing which isn’t subject to market rents).  But living in London is a choice they make.  It is notable also on this point that whereas we observed very different rates of benefit claim between people born in India and those born in Pakistan and Bangladesh, very similar proportions of these two groups live in London.

The purpose of our paper was to illustrate differences in outcomes between different migrant groupings and between migrant groupings and the UK-born population and obviously these will be determined by both opportunities and choices.

Finally, Mr Ayres draws attention to DWP administrative data on ‘key out-of-work benefits’ by nationality at time of registration for National Insurance Number. For the reasons he outlines this does not match exactly country of birth, but is a reasonable proxy for migrant status in the absence of more certain data. He then claims “these figures do reveal a quite different conclusion to that in the Migration Watch report: that, in February 2014, claimant rates were 7.4% for non-UK nationals and 12.7% UK nationals”. These figures reveal no different conclusion at all. The DWP figures are primarily (by both number and cost) Jobseeker’s Allowance, and ESA and incapacity benefits. In paragraph 22 of our report we note in relation to these benefits “Rates of claim for Income Support and Jobseeker’s Allowance differ little between migrants and the UK-born: these cost around £7bn. Migrant rates of claim are noticeably lower only for sickness/disability benefits and the various allowances for carers etc.” It is the much lower rate of claim to these sickness and disability benefits that account for the difference between UK and non-UK claimant rates in the DWP figures, so there is no different conclusion in our report on this point at all! Again Mr Ayres has set up a straw man and asserted we have reached a conclusion that we simply have not, and again this is very disappointing.
Our intention, as we set out at the start of our paper, is to provide some insight into the issue of whether it is reasonable to ascribe the same economic performance  to migrants into the UK as to the UK-born population, and also to counter simplistic contentions like ‘EU good/non-EU bad’ (or vice versa). Wherever possible it was ‘reality-checked’ against data published by DWP, HMRC and other official sources. It by no means purports to be the last word, but rather seeks to help identify areas that need to be considered carefully in carrying out both assessments and forecasts of the impact of migration and in the development of policy on migration.
You can read the original blog by Steven Ayres here: http://commonslibraryblog.com/2015/07/28/migrants-and-benefits/

 

28th July 2015

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