Discuss the extent to which migration can be considered to have a positive impact on labour markets

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Discuss the extent to which migration can be considered to have a positive impact on labour markets?

Migration is the movement of people/labour between either the domestic or other counties. Immigration is the movement of labour outside a country.  The most common reason for immigration is to find jobs meaning an addition to a country’s labour force. In most instances this can have a positive effect on labour markets both, in the immigrant’s native country and the country to which he/she/they migrated to. Although mostly advantageous negative impacts can occur as a result.

If a person migrates e.g to the UK from a less developed country such as Poland in pursuit of work, providing the person finds work and doesn’t become unemployed and in this case the immigrant’s skills match the type of labour that is demanded will increase a country’s output + international competitiveness  and in turn can benefit the labour markets. This is because Migrants are usually young adults meaning that migration can help to raise the population of working age and make the labour market more flexible. A flexible labour market will mean that employers can hire and fire workers more easily and thus the labour market will adjust more easily to changes in the demand for and supply of labour.  This will lower average costs , help reduce cost push inflation and ultimately reduce labour market failure. Furthermore since many migrants into the UK are highly skilled people , employers will be more willing to take them as they will have to spend less on training so there is no risk of the firm losing money if the person decides to move to another firm later. This may mean that more firms will recruit people and expand enjoying economies of scale since it is less risky to employ migrants and immigrants are usually willing to work for a lower wage then someone , native to that country. This will result in lower costs of production which may be passed on to consumers in the form of lower prices. If this is the case for some goods e.g in the cinema industry , if ticket prices drop there will be more demand to go to the cinema. In this case the cinema will pe operating at an allocatevely efficient level and although it will not be/ unlikely to be making abnormal profits, this will help the cinema make more in the long run, especially if there are no rival cinemas near by. This would suggest a largely positive impact on the labour markets.

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Another advantage of migration for the labour markets is that it will increase the number of entrepreneurs in the country benefitting the labour markets and is a supply side gain for the economy. In addition the additional aggregate demand as a result of migration may increase short term economic growth leading to a slightly faster trend rate of growth benefitting the economy in the long run. This will benefit labour markets in the sense that it will increase their sales/output since higher aggregate demand means more total demand for a country’s goods and services. Migration can also achieve this in ...

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