The impact of intra-EU mobility on UK public services
Employment Studies Issue 21
Arianna Tassinari, IES Research Fellow
The mobility of citizens and workers within the EU and its impact on public services and labour markets in receiving countries is currently one of the hottest topics in European public policy, and particularly so in the UK. As migration from the Central and Eastern European EU Member States (so-called EU10 countries) to the UK has grown since their accession in 2004 and 2007, the political debate has increasingly focused on the issue of 'welfare tourism'. Fears centre on a potential increase in the number of individuals moving to the UK, primarily to access better quality public services (largely free at the point of need), thus placing a burden on the UK public service system. In turn, this has resulted in an array of UK government policy initiatives aimed at restricting new migrants' access to benefits. This is featuring highly on political parties' agendas in the run-up to the UK general election, scheduled for May 2015.
But are these fears rooted in evidence? Contributing to this debate, IES carried out research in 2014 for Eurofound, Dublin, which used a mix of qualitative and quantitative research methods to gather further evidence on the impact of migration from EU10 countries on UK public services.
The policy context
Just before EU enlargement in 2004, the UK government changed the law regulating access to benefits for migrants, largely in response to 'benefit tourism' concerns. Since then, new migrants from European Economic Area (EEA) countries have had to fulfil additional requirements to show that they have a 'right to reside' in the UK.
Accordingly, they need to either be in genuine and effective employment, be a student and/ or have sufficient personal resources not to become a 'burden' on the UK social assistance system. Further restrictions were introduced in 2014, preventing new migrants from EEA countries claiming out-of-work benefits for the first three months of their residency, and introducing a minimum earnings threshold to qualify for benefits. In addition, since 1 April 2014, EEA migrants have been unable to claim housing benefit unless they are in work.
How do EU10 migrants access UK welfare services?
While current policy initiatives to curb migrants' access to benefits are rooted in fears of straining public services, existing research evidence indicates that the perception that EU10 migrants are a burden on public resources is largely unfounded, and that these groups, together with other EEA migrants, actually make a positive net fiscal contribution to the UK economy.1 There is also a lack of robust data on EU citizens' use of welfare services in the UK as current government data collection systems do not capture information on welfare users' nationality.
IES' research on this topic included analysis of the UK Labour Force Survey and Annual Population Survey data up to 2013 and qualitative interviews with stakeholders, policy makers and migrants themselves. Our aim was to: understand patterns of public service usage in the UK amongst citizens from the EU10; assess whether they are more or less likely to access various forms of public services than their UK counterparts; and understand the main issues surrounding EU10 migrants' public services access and use.
We found notable differences between EU10 citizens and UK nationals (and other nationality groups) with regard to the take-up of benefits. Overall, EU10 citizens are less likely to claim benefits than UK nationals, and tend to access different types of benefits. For example, only a very small proportion of EU10 citizens in the UK claim the state pension, and larger proportions of UK nationals claim unemployment benefits, income support and disability or sickness-related benefits than EU10 citizens. UK nationals are also more likely to use social housing (15 per cent) than EU10 citizens (13 per cent). However, a larger share of EU10 citizens claim tax credits (19 per cent) and child benefit (28 per cent) compared with UK nationals (12% and 18%, respectively).
Explaining the difference
How do we explain these differences? There are, of course, issues relating to migrants' lack of knowledge of the UK welfare system and language barriers. In addition, our econometric analysis suggests that some of the differences are due to different socio-demographic characteristics and labour market prospects. Citizens from EU10 countries living in the UK are, on average, considerably younger than the UK population, have more dependent children below the age of four and have higher employment rates (although predominantly in low-skilled occupations).
Overall, the difference in the take-up of benefits between UK nationals and EU10 migrants decreases from 6 to 4.4 percentage points once socio-demographic characteristics and employment status are controlled for. The difference in the access to state pension decreases from 10 percentage points to 1 percentage point once we account for differences in socio-demographic characteristics, as this is very strongly determined by age. Similarly, we found no significant difference in the propensity to claim child benefit once we controlled for marital status and the number of dependent children. Controlling for socio-demographic characteristics also reduces the differential in term of access to tax credits, as eligibility is highly associated with the number of dependent children.
However, the difference in the take-up of unemployment benefits and income support cannot be solely attributed to differences in socio-demographic characteristics and employment status between the two groups, as controlling for those factors does not reduce the differential. The difference in use of social housing is also even larger once socio-demographic characteristics are controlled for. This suggests that, for given individual characteristics, the propensity to live in social housing accommodation or receive unemployment benefits or income support is lower for EU10 migrants than UK nationals – possibly a result of eligibility restrictions.
Combining age-related expenditure on public health services with the age profile of different groups, we also found that by virtue of their young demographic profile, the healthcare expenditure per capita for EU10 citizens is also lower than for UK citizens, and the same is true for education-related expenditure.
We also found that the difference in takeup of benefits and social housing between UK nationals and EU10 migrants decreases proportionally as the number of years since arrival in the UK increases. Indeed, the difference in probability of accessing benefits approaches zero over time: after seven years spent in the UK, EU10 migrants were found to have the same propensity to claim benefits as UK nationals.
Conclusions and implications for EU10 migrants
Our research suggests that EU10 migrants are less likely to access benefits than UK nationals because of their lack of awareness of the UK welfare system and the language barriers they may encounter, but also because their sociodemographic characteristics imply that they are currently inherently less prone to place demands on public services than the native UK population. Therefore, our findings largely discount the hypothesis of 'welfare tourism' as a central motivation for EU10 citizens' migration to the UK, and concur with existing evidence in showing that the demands placed by these individuals on the UK welfare system tend to be low.
However, the growing disconnection between evidence and public perceptions around the issue of 'welfare tourism' can have potentially negative consequences for the social integration of EU10 citizens and their social rights.
Many of our interviewees suggested that, in the context of an increasingly heated public debate and an intensification of existing barriers to welfare entitlements, EU10 citizens – who already display little awareness of their entitlement to welfare services and experience great linguistic and bureaucratic barriers when accessing them – run the risk of increasing marginalisation and exclusion. There is even a risk of destitution if they find themselves in unforeseen situations, such as unexpected unemployment, and are unable to access social assistance.
The third sector has traditionally played an important role in providing targeted support and advice to EU10 migrants in difficulties. However, interviewees from various charities emphasised that there are severe limitations to the level of support that the voluntary sector is able to offer, due to current spending cuts.
Our research therefore concluded by recommending that the public debate around 'welfare tourism' in the UK be informed by solid evidence to ensure that restrictions to welfare entitlements do not unfairly hit EU10 citizens in need of genuine social assistance. We also recommended that the capacity of public and voluntary sector service providers to provide support and advice to this group is not further undermined.
This research is due to be published by Eurofound in 2015, as The social dimension of intra-EU mobility: Impact on public services – A country study on immigrants from the New Member States to the United Kingdom (2015) Marangozov R, Nafilyan V, Tassinari A, Buzzeo J.
Kirkup, J. (2014), Immigration has a positive impact, says Office for Budget Responsibility head, The Telegraph [Online] 14th January. Available at: http://www.telegraph.co.uk/ news/uknews/immigration/10570839/ Immigration-has-a-positive-impact-says- Office-for-Budget-Responsibility-head.html [Accessed 24th January 2014].
Migrant workers and labour market mobility
Evidence and literature reviews
 Social dimension of intra-EU mobility: Impact on public services
 A country study on immigrants from the new Member States to the United Kingdom
📝 The social dimension of intra-EU mobility: Impact on public services in the UK
🔗 The true cost of 'welfare tourism': blog by Rachel Marangozov