The Impact of the UK’s Post-Brexit Immigration System on Employment

The United Kingdom’s post-Brexit immigration framework, introduced in January 2021, reshaped the composition of its workforce and migration patterns. Designed to end free movement from the European Economic Area (EEA) and replace it with a unified points-based system, the policy aimed to reduce overall migration. However, recent figures tell a different story.

According to the Migration Observatory (2025), net migration peaked at 906,000 in 2023, before dropping to 431,000 in 2024, still significantly higher than the pre-Brexit average of 250,000–350,000. This surge was largely fuelled by non-EU citizens, who made up the majority of arrivals between 2021 and 2024, reflecting both new visa routes and wider global dynamics.

The most visible change has been the transformation of the UK’s labour market. ONS (2025) data show that non-EU employees held around four million jobs in December 2024, nearly double the 2.1 million recorded in January 2021 (ONS, 2025). This remarkable expansion means that two-thirds of the 2.8 million new employee jobs created since 2021 have gone to adult non-EU workers (HMRC, 2025).

Several factors have driven this trend. The post-study Graduate Visa has attracted more international students who, after completing their degrees, enter the workforce. Additionally, the decision to allow care workers to qualify for work visas in 2022 addressed acute staff shortages in the social care sector, though challenges around low pay and poor working conditions persist. These changes have effectively broadened the labour supply, particularly in lower-wage and high-vacancy sectors.

Academic evidence suggests that migration’s effects on the employment and wages of UK-born workers are generally modest. Research by the Migration Advisory Committee (2018) and others indicates that the overall impact is small but unevenly distributed. Lower-paid UK-born workers, who often compete in similar roles to newly arrived migrants, may experience downward wage pressure, while higher-paid employees tend to benefit.

This dynamic partly stems from what economists describe as occupational downgrading, where skilled migrants accept jobs below their qualification levels due to barriers such as non-recognition of foreign credentials. As a result, competition tends to increase most in the lower-wage segment of the labour market. However, this effect is limited in scale and often offset by broader economic benefits.

Importantly, migration does not simply expand the workforce, it also generates new demand for goods and services. Migrants contribute as consumers, taxpayers, and entrepreneurs, prompting businesses to hire more staff and in some cases, expand operations. Research by Gray et al. (2020) and Lewis (2011) suggests that firms often respond to immigration by shifting towards more labour-intensive production methods. This adaptive behaviour helps balance the increase in labour supply, which explains why large migration inflows do not automatically lead to higher unemployment among UK-born workers.

Recent policy changes such as raising salary thresholds for work visas and tightening rules on dependants of care workers and students have begun to slow net migration. Yet, the long-term implications remain uncertain. While these measures may ease short-term political pressure, they could also exacerbate existing labour shortages, particularly in sectors like healthcare, logistics and hospitality.

The UK economy has become increasingly reliant on non-EU labour since Brexit. If future restrictions make recruitment more difficult, employers may face rising costs, reduced productivity and slower growth. Conversely, a more stable and well-managed migration system could help align immigration with economic priorities, supporting industries that depend on migrant skills while maintaining fairness for domestic workers.

The UK’s post-Brexit immigration system has had a profound impact on employment, driving record participation by non-EU nationals and reshaping the labour market. Although migration’s overall effects on wages and employment are small, they are not uniform. The challenge for policymakers is to balance control with economic need, ensuring that the system remains both responsive and sustainable in the years ahead.

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