Brexit has been one of the most consequential institutional shocks to a major European economy in recent decades. This column examines how Brexit reshaped the volume and composition of UK migration flows relative to Germany. The results show that migration volume increased after both the 2016 referendum and the 2021 end of free movement, but through different channels: the referendum reduced emigration relative to Germany, while the post-2021 points-based system triggered a reallocation of inflows away from EU free movement migrants toward non-EU migrants from the rest of the world, with a markedly stronger skill-selective profile.
Leaving the Single Market and the end of free movement in 2021 constitutes one of the most consequential institutional shocks to a major European economy in recent decades. Migration, more than any other domain, became both a political catalyst and a policy arena in which the implications of decoupling from the EU were most visible. Benchmarking the UK against Germany, the largest remaining EU economy and a stable participant in free movement, provides a natural comparative framework for identifying the magnitude and direction of Brexit-induced migration shifts. Following the 2021 termination of free movement, the introduction of the UK’s points-based immigration system further increased net migration relative to Germany, driven by the sharp expansion of non-EU skilled migration streams. This pattern underscores a fundamental paradox at the heart of the Brexit debate: the institutional rupture increased net migration rather than reducing it, revealing the primacy of labour-market demand and policy design over the political promise of tighter borders.
Building on earlier VoxEU debates on Brexit and migration, Portes (2016, 2018) highlights both the anticipated and actual consequences of the referendum for UK–EU mobility, emphasising expectations, policy uncertainty, and labour-market adjustment. Dustmann et al. (2017) explore wider European migration pressures and institutional resilience, shedding light on how free movement responds to economic cycles and political shocks. Additional work includes Nickell and Saleheen (2015) on concerns over low-skilled inflows, Campos et al. (2018) on EU membership effects, and Aiyar et al. (2016) on labour mobility and adjustment within the EU. These studies provide further empirical grounding for the structural and re-allocative migration patterns observed in the post-Brexit UK.
With the UK’s exit from the EU and the end of free mobility of people, the self-selection framework (Borjas 1987) and its fiscal policy extensions (Razin et al. 2002, Razin and Wahba 2015) point to a clear dynamic: a sustained long-term decline in high-skill migration, together with weaker FDI inflows, can steer the economy toward a lower-productivity equilibrium and a deteriorating fiscal balance.
The Brexit referendum introduced unprecedented uncertainty into UK-EU labour mobility (Portes and Forte 2017a, 2017b, Wadsworth et al. 2016), disrupting a system in which free movement had long enabled substantial EU migration into the UK (Dustmann et al. 2010). Germany followed a different trajectory over the same period, maintaining stable intra-EU mobility and sustained humanitarian inflows (OECD 2023, Brücker et al. 2019). The broader literature on institutional shocks to migration regimes emphasises the centrality of expectations and anticipatory adjustments (Hatton and Williamson 2005, Clemens 2011) and provides the conceptual link between structural regime shocks and policy-induced reallocation in migration systems (de Haas 2010). These dynamics also intersect with well-documented patterns of skill-based selection (Docquier and Rapoport 2012) and the political-economy determinants of immigration control (Facchini and Mayda 2008). Empirically, the study applies standard difference-in-differences identification strategies (Angrist and Pischke 2009, Bertrand et al. 2004) and comparative institutional methods (Autor 2003) to benchmark the UK against Germany. The results — showing a collapse in EU inflows and a parallel expansion of non-EU skilled migration — are consistent with UK administrative data (Home Office 2023) and recent assessments of post-Brexit immigration reform (Sumption and Vargas-Silva 2022). Razin and Wahba (2015) show that the generosity of the welfare state affects skill-based migration differently depending on the migration regime: under free movement within the EU, higher welfare generosity tends to attract relatively more low-skilled migrants, while under restricted migration from outside the EU, welfare generosity is associated with a higher share of skilled migrants. The modest post-2021 increase in UK-born emigration aligns with findings on skilled-worker outflows under institutional uncertainty (Goodwin et al. 2022, Benson and Lewis 2019), while Germany’s stability signals the resilience of the EU free-movement regime (Recchi and Favell 2019).
To illustrate migration patterns, Figure 1 presents the evolution of immigration, emigration, and net migration as shares of the labour force in the UK from 2010 to 2023. The trends highlight the two major Brexit-related regime breaks — the 2016 referendum and the 2021 end of free movement — and illustrate the sharp reconfiguration of the UK’s migration system during this period. Immigration (red line), which had been relatively stable throughout the pre-Brexit decade, declines modestly after 2016 but rises steeply after 2021 with the introduction of the new points-based system, reaching historically high levels. Emigration (blue line) exhibits the opposite pattern: it falls significantly following the referendum, contributing to higher net migration, before rising modestly in the later period — consistent with emerging evidence of increased outward mobility among UK-born workers. Net migration (green line) remains positive throughout, but the post-2021 surge in inflows produces a marked upward shift. Overall, the figure visually captures the central empirical finding: Brexit did not reduce migration but instead reallocated and reshaped mobility flows, shifting the UK from an EU-centred free-movement regime to a globally oriented, skills-selective migration system.
Figure 1 Migration flows in the UK, 2010-2023 (immigration, emigration, and net migration as shares of the labour force)
Figure 2 illustrates the trajectory of immigration, emigration, and net migration in Germany between 2010 and 2023, providing a stable benchmark against which the UK’s Brexit-induced shifts can be evaluated. Unlike the UK, Germany did not experience a political or institutional rupture in its mobility regime during this period; it remained fully embedded in the EU’s free-movement framework and continued to admit both EU movers and humanitarian migrants under consistent policy rules. The figure shows relatively steady inflows and outflows, with temporary fluctuations driven by identifiable external events — most notably the 2015–2016 refugee crisis — rather than by regime change. Net migration remains positive throughout, with moderate variance and no structural breaks. This stability underscores Germany’s role as an appropriate counterfactual in the difference-in-differences analysis: by contrasting the UK’s sharp post-2016 and post-2021 deviations with Germany’s steady patterns, the analysis isolates the extent to which Brexit — not broader European trends — reconfigured UK migration dynamics.
Figure 2 Migration flows in Germany, 2010-2023 (a stable EU benchmark for comparison with the UK)
This section presents the empirical findings from the difference-in-differences (DiD) framework that evaluates how the two major Brexit shocks — the 2016 referendum and the 2021 termination of free movement — altered the UK’s migration dynamics relative to Germany.
Germany offers a natural counterfactual because it remained continuously embedded in the EU’s free-movement regime and did not experience parallel institutional disruptions. Accordingly, divergence between the UK and Germany after 2016 and 2021 can reasonably be interpreted as reflecting the causal impact of Brexit-induced institutional change.
The empirical strategy compares migration outcomes in the UK and Germany over time. Two indicators capture the timing of the Brexit shock. The first marks the period after the 2016 referendum, when expectations and uncertainty changed, but free movement formally remained in place. The second marks the period after 2021, when free movement ended and the post-Brexit migration regime became fully operational. These timing indicators are interacted with a UK indicator, so their effects are identified by how migration in the UK changes relative to Germany in each period.
This structure has three key components. First, it controls for persistent differences between the UK and Germany that do not vary over time, such as geography, language, or long-standing institutional features. Second, it absorbs year-specific forces that affect both countries equally, such as global economic conditions, the COVID-19 shock, or worldwide migration trends. Third, it isolates two Brexit-related effects that differ by migrant group: an anticipatory effect associated with the referendum period, and a structural effect associated with the termination of free movement.
Interpreted this way, the estimated effects measure how migration rates in the UK diverged from their German counterparts after 2016 and again after 2021. This makes it possible to distinguish uncertainty-driven responses from the longer-run institutional consequences of Brexit, while holding constant both country-specific fundamentals and global shocks.
Figure 3, Panel A shows that both the Post2016 and Post2021 interaction terms are positive, precisely estimated, and highly significant (0.42*** and 0.46***, respectively). These results indicate that net migration into the UK increased relative to Germany following both Brexit shocks.
The immigration estimates in Figure 3, Panel B exhibit a striking two-phase dynamic. The Post2016 coefficient is negative (–0.07***), signalling that immigration into the UK declined relative to Germany in the immediate aftermath of the referendum. This contraction aligns with the behavioural responses documented in the preceding sections.
The Post2021 estimate is large and positive (+0.44***), reflecting the substantial rise in non-EU skilled migration, health-care migration, and international student mobility enabled by the post-Brexit points-based system. In contrast, Germany — unaffected by the institutional shock — maintained a relatively stable trajectory of both EU and non-EU inflows.
The emigration estimates provide crucial context for the interpretation of net migration. Figure 3, Panel C indicates that emigration from the UK declined sharply relative to Germany after 2016, with a large negative and statistically significant coefficient for Post2016 (–0.49***). This decline reflects the stabilising effect of the EU Settlement Scheme on resident EU populations, as well as the absence of an immediate outward surge among UK nationals.
By 2021, the estimated effect has largely dissipated (–0.02***), indicating stabilisation but no evidence of a post-Brexit emigration wave. Together, these findings show that outward mobility did not rise in response to either institutional shock; instead, the suppressive effect on emigration in the post-referendum years significantly contributed to rising net migration.
Figure 3 Brexit effects on UK migration relative to Germany (difference-in-differences estimates)
A) Net migration: UK relative to Germany
B) Immigration: UK relative to Germany
C) Emigration: UK relative to Germany
Our findings support the broader argument advanced in this column: Brexit functions as a structural regime shock that reorients, rather than reduces, the UK’s migration flows. The shift is both quantitative — raising net migration — and qualitative, altering the skill composition, regional origins, and institutional channels through which migrants enter and exit the UK labour market. The difference-in-differences results provide empirical foundation for understanding Brexit not as a tightening of borders but as a reallocation of mobility regimes, marking the transition from an EU-centred labour mobility framework to a global, skills-selective migration system.
The difference-in-differences framework centred on the Brexit shock effectively captures its short-run consequences, revealing an immediate rise in institutional and policy uncertainty.
While the difference-in-differences short-run effects are significant, they are not necessarily indicative of the longer-run consequences that are fundamentally structural. Brexit appears to raise key dimensions of institutional risk that shape both investment behaviour and the composition of migration flows. Drawing on the self-selection literature (Borjas 1987, Razin et al. 2002, Razin and Wahba 2015), the analysis highlights how heightened institutional and fiscal risk alters the skilled–unskilled migrant mix. Borjas emphasises migrant self-selection driven by relative returns to skill, while Razin and co-authors extend this mechanism to environments characterised by fiscal policy fragility.
Source : VOXeu
A growing body of evidence shows that rising inflows of immigrants and refugees can trigger…
Standard Chartered says country to benefit from shifts in global supply chains, strong non-oil sector.…
In October, the company listed a $130 million sukuk on the Muscat Stock Exchange. Oil…
Two GCC markets account for 91% of total funding deployed across MENA. Startups in Saudi…
From urbanization to agriculture, land systems touch nearly every aspect of development. That’s why the…
US objections have not killed off the 15 percent global minimum tax, but they have…