Understanding free movement and migration in the European Union
Concentrating effects on low-wage workers
The evidence about the impact of migrants on wages suggests small effects on average and potentially larger effects in specific occupations. These effects can vary across countries and over time as they partly depend on the type of labour market in the host country, and on the characteristics of incoming migrants.
In flexible labour markets, such as the UK, wage levels vary and it is relatively easy to hire and fire staff. But in more regulated labour markets, like Sweden, bodies such as trade unions play a greater role in setting wages, and employment rights can make it harder to sack staff.
This can mean that, in flexible labour markets, an increase in low-skilled migrant workers can allow employers of lower-waged staff to keep wages low to keep down costs. In higher-waged roles or more regulated labour markets, employers typically find it more difficult to use immigration to lower workers’ wages.