UK jobs and the EU
13th May 2016
- Figures from the early 2000s suggest around 3 million jobs are linked to trade with the European Union. The figure is similar now using the same methods.
- They don't say they are dependent on the UK being an EU member.
- Researchers get this figure by assuming that the proportion of people in work had jobs linked to EU exports follows the proportion of the economy that's based on EU exports.
3 million jobs: linked to exports not membership
Two studies from the early noughties came to similar conclusions when they tried to estimate the number of UK jobs linked to trade with the EU:
- A 2000 South Bank University research paper estimated 3,445,000 jobs in the UK "depend upon exports to the EU" - 2.5 million directly and 900,000 indirectly. 'Direct' employment is people employed in industries that export to the EU, 'indirect' relates to jobs that come about as a result of increased demand for products resulting from exporters' profits and their workers' wages. It cautioned that:
"The aim of the present investigation is not an overall evaluation of EU membership, but rather an estimate of the employment effects that result from the exports of goods and services from the UK to the EU.
"Although many previous studies have sought to answer the question of what would have happened if Britain were not a member of the EU, we do not seek to test this counterfactual hypothesis"
- A 2000 paper by the National Institute of Economic and Social Research (NIESR) estimated, using similar methods, that up to 3.2 million UK jobs "are now associated directly with exports of goods and services to other EU countries". It warned that:
"there is no a priori reason to suppose that many of these [jobs], if any, would be lost permanently if Britain were to leave the EU."
Jonathan Portes, who was at the time Director of NIESR, has since described this research as "past [its] sell-by date."
Both studies broadly assume that the proportion of UK jobs associated with EU exports is the same as the proportion of UK Gross Domestic Product (GDP) that's based on exports to EU countries. The South Bank study admits though that this isn't necessarily the same across different UK industries, some of which export more than others. Its estimate thus breaks the jobs down by industry.
The government also favours this approach, using this methodology to estimate in 2014 that 3.3 million jobs in the UK "may be related to exports to other European Union countries", though it notes this is "not an estimate of the impact of EU membership on employment". These estimates have also been used in several answers to parliamentary questions over the past decade.
Updating the estimates for today: between 3.3 million and over 4 million
Two other estimates put the figure higher than the government's recent 3.3 million estimate, suggesting over 4 million jobs are associated with exports to EU countries. Again, these said nothing about dependency on membership of the EU.
The Centre for Economics and Business Research has updated the South Bank Paper, using the same methods to analyse data from 2011. It found that 4.2 million jobs were associated with exports to the EU. It has since revised this down to 3.1 million.
The House of Commons Library used similar methods looking at the whole economy rather than an industry-by-industry breakdown and found that on this measure 4.5 million jobs were "dependent" on exports to EU countries.
It's an imprecise figure, although the same method applied to figures for 2000 showed just over 3 million jobs linked to EU exports. It suggests, at the very least, there may have been some increase since then (although the working population has also grown).
Jobs not dependent, but in danger?
One of the authors of the original 2000 research, Professor Iain Begg, commented to the Telegraph last year that:
"The key point is to establish that such a high proportion of jobs in the export sector depend on demand from other countries in the European Union, and they become a bit more vulnerable if Britain decides to leave the European Union.
"It wouldn't mean an overnight loss of jobs; it wouldn't mean there would be a loss of prosperity instantly, just that the risks become greater."
Even though the jobs identified in the studies are being linked to EU trade rather than membership, there's still a possibility that leaving the EU could have an effect on the trading figures at some point. At the same time, it's difficult if not impossible to quantify this.
- UK Jobs Dependent on the EU: South Bank University study from 2000.
- The jobs content of UK trade 1995-2004: Research paper by the now-defunct Department for Business, Enterprise and Regulatory Reform.
- UK-EU economic relations - key statistics: House of Commons Library paper with background discussion and recent estimates.