Thesis

Intra-EU Labour Mobility and the Welfare State 93 Δ Unemployment replacement rate Δ Unemployment replacement rate Δ Social assistance replacement rate Δ Social assistance replacement rate Log of GDP per –41.88*** –41.57*** –3.29 –0.45 capitat-1 (14.32) (13.85) (3.22) (6.26) Δ Unemployment –0.45 –0.51 –0.15* –0.28** (0.34) (0.34) (0.18) (0.12) Unemploymentt-1 –0.20* –0.16 –0.09 –0.15 (0.12) (0.10) (0.07) (0.10) 2004 expansion 0.32 0.35 0.68** 0.78*** “restrictions lifted” (0.43) (0.46) (0.29) (0.27) 2007 expansion –0.29 –0.19 –0.22 –0.38 “restrictions lifted” (1.06) (1.01) (0.28) (0.26) 2013 expansion 5.34*** 5.69*** 0.90*** 0.82* “restrictions lifted” (0.80) (0.76) (0.34) (0.45) Constant 478.76*** 471.67*** 37.68 1.22 (157.59) (152.04) (35.95) (63.87) Country fixed effects YES YES YES YES N 162 162 120 120 adj. R2 0.18 0.19 0.57 0.53 Rho 0.00 –0.03 –0.19 –0.15 RMSE 4.50 4.51 1.31 1.37 4.6 Conclusion Milton Friedman famously once said: “you cannot simultaneously have free immigration and a welfare state” (1999). However, our results from a crosscountry comparison of 16 European countries suggest that it may not be this black and white. All 16 countries are subject to EU freedom of movement laws and the results show predominantly positive associations between intra-EU labour mobility and welfare state effort. Our results show that particular aspects of EU labour migration are positively associated with several subdomains of social welfare spending, as well as for the unemployment and social assistance replacement rates. This indicates that EU freedom of movement and welfare state provision seem to be compatible and that European welfare states are resilient in the face of increasing immigration. In the existing literature, immigration has been measured as an aggregate measure, the percentage of foreign-born or net migration for example. However, by conflating different immigrant groups, it is not possible to

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