Ukrainian displaced people - economic impact of migration: discussion paper

Executive summary

The purpose of Scotland’s support for migration from Ukraine to Scotland is humanitarian; to provide safe haven for those fleeing war in Ukraine. Evidence suggests that migration can have an overall positive effect on the host country’s economy. However, there may be differences between the profile of those fleeing the war in Ukraine and Scotland’s recent in-migrant population and Ukrainian displaced people (UPDs) may face barriers to employment.

The number of working age UDPs in Scotland is relatively small. Latest data indicates that almost 16,400 Ukrainians of working age (18-64) may have arrived in the UK with a Scottish sponsor (SG or individual) up to 31 December 2022. HMRC data shows that 1,950 Ukrainians who recently registered for a National Insurance number (NiNo) were in payrolled employment in September 2022. This represents around 0.1% of those in employment in Scotland.

In the short run, UDPs could play a small, but important, role in helping fill vacancies in sectors experiencing recruitment difficulties in a relatively tight labour market in Scotland. Over time and with successful integration, assuming Ukrainian displaced people could stay in Scotland, there could be a shift towards sectors better aligned with the experience and qualifications of this group. Latest vacancy data suggests spare capacity across some of these sectors (health care, education and financial services) but for some occupations difficulties around recognition of qualifications could act as a barrier.

Should Ukrainian displaced people be successful in finding permanent employment, they may make a small but important contribution to Scottish income tax revenues. As a broad illustration, they could contribute up to £3 million in income tax receipts in 2023-24 (0.02% of the total revenues) if they earned the full time Real Living Wage.