EU Freedom of Movement and Migration

Roxana Nedelescu*, 8 September 2015

From the migration crisis born by massive influx of migrants and refugees from North Africa and the Middle East to the EU,  Member States and their political leaders should learn that a common migration and asylum policy is needed. Europe has to stand together in order to efficiently manage extra-EU migration flows and even assist in ending the conflicts in native countries that drive migration.

A closely related topic is intra-EU migration flows. It should be made clear that the freedom of movement is not the same as freedom of residence. In order to reside for more than three months, the right of residence is granted under certain conditions, i.e. sufficient economic resources as well as sickness insurance need to be guaranteed such that the EU citizen and his family do not represent a burden for the host country social services and they may need to register with the local authorities.

Numerous political discussions arose from having an incomplete labor market and partial coordination of social welfare systems, such as ongoing discussions concerning welfare system restrictions for non-nationals. Focusing on the latter problem, one must point out the demand of British Prime Minister, Mr. David Cameron, of EU treaty reforms that would restrict EU workers access to in-work benefits as well as child benefits, impose tighter restrictions on new Member States and EU job seekers as well as ban those abusing the free movement right, among other points on his treaty reform shopping list. While the claim of the abuse of the free movement of persons is reasonable and has been addressed in the UK by reforming the Habitual Residence Test,  most of his aims may be already achieved by amending national legislation, without a need for treaty reform. Still, one has to ask himself whether or not these measures are rational before taking any action.

Rather than  jumping to conclusions, let’s have a look at some facts:

Source: The Telegraph, 2015

Source: The Telegraph, 2015

  1. What is the EU/ UK migrant balance?

1,4 million Britons reside in another EU Member State. Among top EU destination Member States are Germany, France, Ireland, Spain and Italy (UN, 2013). 2,7 million  EU citizens reside in the UK.

Almost double. From this point, we conclude that less Britons reside in another EU Member State, than the other way around.

  1. What is the EU/ UK benefit receivers balance?

Looking only at unemployment benefits,  on the one hand, 2.5% Britons leaving abroad claim unemployment benefits in other EU Member States. On the other, 2.5%  EU residents leaving in the UK, receive job seeker allowance.

From this point, we may conclude that approximately the same percentage of British citizens residents in other EU Member States,  as vice-versa,  receive unemployment benefits. Therefore,  the balance seems to be even in terms of quantity. However, the math is not that simple, as one has to account in the same equation the differences in  social welfare systems across countries and therefore that some are more generous than the UK job seeker allowance. Also, one  has to take into account distributional effects, as for the British residents abroad the burden is shared across different EU Member States.

B5

  1. If the benefit balance is even, why debating on “benefit tourism[1]” and reforming the treaty?

Well, mainly because of the Western-Eastern divide. It is very easy to see that there is a spike  in the number of unemployment benefit receivers if one looks at Polish UK residents that receive social benefits  in the form of job seeker allowance. Despite the low number of job seeker allowance requests coming from Romanian and Bulgarian residents in the UK, fear of massive social system requests propagated the miss-concept that the later mentioned  nationals, will abuse of their right to move freely, having the sole purpose of free-riding on the social welfare system of the country of residence, in this case the UK.

  1. What is actually happening in the UK?

Research shows that 79% of the Romanians in the UK are employed, which disproves the “benefit tourism” theory and that of being a burden on the British social security system. Furthermore, from 1995 to 2012, despite the total number of requests, European migrants contributed to the British tax system with £ 25 billion, and £ 15 billion were only East European contributions (Dustman and Frattini, 2013). On average, European migrants are charged £ 1.34 per £ 1 received as benefits, that makes European migrants the main losers and not winners of the UK social security system.

What  to conclude now?

Certainly, political debate needs to be supported by facts. Free movement of workers entails benefits, as well as costs. In the case of the UK if one looks simply at the economics, one may conclude that the balance is even in terms of own citizens benefitting from assistance from other Member States, and even positive in terms of fiscal contributions from EU citizens. Therefore,  restricting further the access to benefits for the EU citizens that legitimately work and contribute to the fiscal system in the country of residence based on nationality, is not fair either in terms of efficiency, or equity.

Bearing this in mind, migration is not an easy topic. Certainly it is not one for which agreement can be reached overnight, since cultural differences may play an important role. Still, it is not to be taken for granted what the European Union has achieved so far. In fact, further integration in terms of labour market such as creating a legitimate institution to  protect mobile workers rights as well as agreeing on a common migration policy could be a way ahead for the European Union. The same applies for extra-EU migration, where a European policy is needed rather than individual actions taken by Member States.

[1] In the UK, social benefits are accessed on condition of previous contributions.  Benefit tourism concerns: State pension credit, Income-based allowance for job seekers, Income support, Disability living allowance, Family/Child benefit and Housing benefit, which are residence based.

*The author is grateful to Prof. P. Nicolaides for useful comments. For previous articles by this author, please see Roxana Nedelescu (neé Sandu).

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