About a quarter of the UK's top earners are migrants, data shows
Of the 525,000 people in the top 1% each earning more than £128,000, 24% moved to the UK as adults, according to the research by academics at the University of Warwick. Migrants make up just 15% of the UK population as a whole. Arun Advani, the lead author of the paper, said the research suggested that people who were concerned that migration was a drain on the economy were not considering the impact of high earners moving to the UK.
“A lot of the worries about migrants is about the bottom end of the distribution,” said Advani, an assistant professor at the Warwick’s economics department and director of Cage, its research centre focusing on inequality. “But, actually migrants are hugely prevalent at the top of the income distribution – and therefore paying more tax.”
The prevalence of migrants is even more stark among the very well paid. In the top 0.001% of UK-based earners almost four in 10 is an immigrant. This is almost three times as many that would be expected if incomes were distributed evenly. Among low-income groups, only about one in six people are migrants.
Advani said that before starting out on the research, which is based on confidential HMRC tax returns, he suspected that migrants would be over-represented among high earners as many non-UK born people work in finance, technology and medicine, but that he was shocked at the scale of the imbalance.
“I was genuinely surprised, and we spent a long time convincing ourselves that we weren’t screwing it up,” Advani said. “But we checked and triple-checked it and it was correct.” The data has also been checked by officials at HMRC.“People may not think of ‘migrants’ as being rich,” said Advani, who is the son of migrants. “But if you stop and think who are the wealthy people hanging out in Mayfair, a lot of them are not UK-born. Or if you go to Canary Wharf [where many of the world’s biggest banks have their European headquarters] you will hear a lot of voices in [other] European languages because people come here for well-paying jobs.”
The research shows that the number of well-paid migrants has been growing fast. “There are 52% more migrants in the top 1% in 2018 than in 1997, and more than twice as many in the top 0.01%,” the paper, called Importing inequality: Immigration and the Top 1%, states. Almost all [85%] of the growth in the UK top 1% income share over the past 20 years can be attributed to migration.”
The data shows that four in 10 of the best-paid bankers are migrants, and they earn an average of £383,300 before tax. Just under 40% of the highest-paid people working at UK hospitals are migrants, earning an average of £160,400. In “web portal” work 51% of the best-paid people are migrants, and they earn £259,700 on average. In professional sport 31% of the top-paid workers are from abroad.
Advani said the research could prove important as politicians debate the introduction of a “wealth tax” on the highest-earning people to help pay for the recovery from the coronavirus pandemic.He said a fresh tax on higher earners could lead to many leaving as they “often have less to tie them to the UK than people who were born here”.
“There are a lot of high performing international people here and if you make it very unattractive for them, people worry that they might leave.”Advani and his team carried out the research at a secure facility run by HMRC in Canary Wharf where they had access to the anonymised UK tax returns of millions of people. They were able to determine who were migrants by analysing National Insurance numbers, which are different if people arrived in the UK as adults rather than being born in the country.
Source: The Guardian