The fiscal impact of EU immigration on the tax-financed welfare state: Testing the ‘welfare burden’ thesis

Dorte Sindbjerg Martinsen; Gabriel Pons Rotger

doi:10.1177/1465116517717340

The fiscal impact of EU immigration on the tax-financed welfare state: Testing the ‘welfare burden’ thesis

Dorte Sindbjerg Martinsen, Gabriel Pons Rotger

Centre for European Politics

18 Citations (Scopus)

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Abstract

The European Union’s rules on free movement of people and the right to cross-border welfare are increasingly contested and have evoked one of the most salient debates in EU politics. The assumption that EU immigrants pose a net ‘welfare burden’ on the host member state has sounded loud and wide in recent years. This calls for an empirical test. In this article, we examine the fiscal impact of EU immigration on the universalistic, tax-financed welfare state of Denmark. We analyse EU citizens’ contribution to and consumption of welfare benefits between 2002 and 2013 on the basis of a unique dataset of administrative data, consisting of repeated cross sections of 100% of the EU population residing in Denmark. We find that EU immigrants made a significant positive net contribution to the Danish welfare state over the long time span examined and thus reject the ‘welfare burden’ thesis for the crucial case of Denmark.

Original language	English
Article number	6
Journal	European Union Politics
Volume	18
Issue number	4
Pages (from-to)	620-639
ISSN	1465-1165
DOIs	https://doi.org/10.1177/1465116517717340
Publication status	Published - 1 Dec 2017

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Cite this

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title = "The fiscal impact of EU immigration on the tax-financed welfare state: Testing the {\textquoteleft}welfare burden{\textquoteright} thesis",

abstract = "The European Union{\textquoteright}s rules on free movement of people and the right to cross-border welfare are increasingly contested and have evoked one of the most salient debates in EU politics. The assumption that EU immigrants pose a net {\textquoteleft}welfare burden{\textquoteright} on the host member state has sounded loud and wide in recent years. This calls for an empirical test. In this article, we examine the fiscal impact of EU immigration on the universalistic, tax-financed welfare state of Denmark. We analyse EU citizens{\textquoteright} contribution to and consumption of welfare benefits between 2002 and 2013 on the basis of a unique dataset of administrative data, consisting of repeated cross sections of 100% of the EU population residing in Denmark. We find that EU immigrants made a significant positive net contribution to the Danish welfare state over the long time span examined and thus reject the {\textquoteleft}welfare burden{\textquoteright} thesis for the crucial case of Denmark.",

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The fiscal impact of EU immigration on the tax-financed welfare state: Testing the ‘welfare burden’ thesis

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