IZA Discussion Paper No. 14699

The Early Effect of the COVID-19 Pandemic on the Labour Market Outcomes of Natives and Migrants in the UK

It has been found that migrants and natives are affected differently by fluctuations in the business cycle. This paper analyses whether this is the case when considering the most recent economic downturn triggered by the Covid-19 pandemic. By using UK data, it finds that unemployment has increased for both natives and migrants as has, consequently, the benefits which are aimed to support non-employed households. The rise in these outcomes is particularly important for EU migrants. EU migrants have also been more likely to experience a decrease in pay during the pandemic. Natives, EU workers, and non-EU workers have all suffered similar decreases in hours worked. Since migrants are likely to adjust to negative shocks by return or re-migration, these findings suggest that the recent increase in emigration from the UK can be partly explained by the negative effects of the pandemic on migrants labour market outcomes.

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