Since 2010 the UK Government has aimed to reduce net migration. The UK Government cannot restrict EEA migration, and it has focused instead on restricting non-EEA migration, including closing routes intended for non-EEA high-skilled workers. We identify a possible substitution effect in this context: restricting one type of migration may lead to an increase in an unrestricted type (i.e., ‘balloon effect’). We present evidence which is consistent with this substitution effect for the case of high-skilled migrant workers in the UK. We also construct counterfactual estimates of the number of different types of migrant workers in the UK with pre-policies conditions.
Rienzo, C. and Vargas-Silva, C. (2015) ‘Targeting Migration with Limited Control: The Case of the UK and the EU’, IZA Journal of European Labor Studies, 4:16