Most EEA countries benefit financially from EU mobility

28 March 2018

In a new report, Uppsala University researchers show that most countries in the European Economic Area (EEA) benefit financially when they receive a citizen from an EU country who moves there to live and work. The report includes migration between 2004 and 2015.

However the analysis – undertaken by researchers at Sweden’s University of Uppsala, as part of a larger Oxford University project – also shows that the benefits were distributed unevenly. The findings create opportunities for policy-makers around Europe to compare approaches and outcomes, and potentially to refine and improve both national and EU-wide policies.

Switzerland, Cyprus, Norway and Belgium experienced the greatest net fiscal benefits, while Slovakia, Poland and Estonia experienced the greatest net fiscal cost of EU immigration. In all, more than two thirds of EEA countries saw net fiscal gains from EU immigration.

Effects of free movement in the EU

The findings come from the first major pan-EEA analysis of the fiscal impacts of European mobility. The research was undertaken by researchers at Uppsala University in Sweden, as part of the REMINDER (Role of European Mobility and it’s Impacts in Narratives, Debates and EU Reforms) Project – a major international programme of research run by the University of Oxford and funded by Horizon 2020, which is investigating the social and economic impacts of freedom of movement around the EU, and public discourse about the issue.

The vast majority of EEA countries – 21 out of 29 – saw positive net fiscal impacts during 2004-2015, receiving more in taxes and other contributions from EU migrants than they then spent in services (such as education, healthcare, infrastructure costs, welfare benefits and other costs) that were provided to EU migrants.

“Our analysis shows that in most countries in the EEA, EU citizens pay slightly more in taxes and other contributions to the state than they receive in services, meaning that they make a net fiscal contribution. This isn’t the case in all EEA countries, and a few – generally lower-income countries in Eastern Europe – end up with fiscal losses. The countries that have tended to see the biggest net benefits are countries that have a significant share of EU migrants in their populations,” says report co-author Dr Rafael Ahlskog, researcher at Uppsala University.

Scrutinise the impacts of a common policy

“The analysis is important because it provides a bigger picture allowing us to scrutinise the impacts of a common policy. It shows that in most cases – whether the effect is positive or negative – it is relatively limited and generally accounts for less than 0.4% of GDP. Nevertheless, this can still mean many billions in revenue – or, less commonly, costs – for a nation’s economy,” says Dr Pär Nyman, co-author of the report and researcher at Uppsala University.

Dr Nyman adds: “It is important to keep in mind, however, that these figures are all calculated based on a number of necessary assumptions, and should be taken as fairly robust pointers rather than the absolute truth.”

The analysis is consistent with other independent cross-national analyses of the fiscal impacts of immigration – notably work undertaken by the Organisation for Economic Co-operation and Development (OECD), though this did not look specifically at EU mobility.

Migration data collected in different ways

The report also highlights the need for improved processes for collecting and comparing social and economic data from across the European Union.

“The researchers have produced the first ever cross national analysis of the fiscal impacts of EU immigration. It shows clearly that the majority of EEA member states saw fiscal benefits, but was made considerably more difficult by the different ways that migration data is collected around the bloc. Hopefully greater efforts can be made at consistency in the future, which will allow better understanding of the impacts of migration,” says Dr Carlos Vargas-Silva, Head of the REMINDER Project at the University of Oxford.

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Facts

  • Two EEA countries are excluded from the analysis on the basis of a lack of suitable data – Luxembourg and Romania.
  • It should be noted that the analysis was undertaken to facilitate comparison between countries, rather than to provide definitive country level data.

Full report: Fiscal effects of intra-EEA migration

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