Brexit and UK Migration: Germany-Benchmarked Evidence on Structural and Reallocation Shifts

This paper examines how Brexit reshaped the volume and composition of UK migration flows. To address the inherent endogeneity of migration responses to political change, the study employs a Difference-in-Differences design that benchmarks the United Kingdom against Germany, a stable EU member unaffected by Brexit-related institutional shocks. Treating the 2016 referendum and the 2021 end of free movement as sequential shocks, the results show that migration volume increased after both shocks, 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. The paper analyzes how Brexit reshaped migration flows into and out of the United Kingdom by exploiting the 2016 referendum and the 2021 termination of free movement as sequential institutional shocks. Using a Difference-in-Differences design with Germany as a stable EU benchmark, the results show that Brexit acted as a structural regime shock, not a border-tightening event. Net migration into the UK rose after both shocks—first due to a sharp post-referendum decline in emigration relative to Germany, and later due to a substantial expansion of non-EU immigration under the new points-based system. Immigration patterns exhibit a clear regime shift, with EU inflows contracting sharply after 2016 and globally sourced, skill-selective inflows rising after 2021. In the later period, a modest but notable increase in UK-born emigration relative to Germany also emerges, reflecting frictions in post-Brexit mobility. Overall, Brexit reoriented—rather than reduced—UK migration flows, transforming both their scale and composition.