72 Chapter 4 lower wages (Brady & Finnigan, 2014; Jørgensen & Thomsen, 2016) thus also increasing the demand for a stronger social security net. Second, since labour market participation is higher among labour migrants than among migrants in general, the concerns among natives and policymakers about the pressure from labour migrants on the government’s budget for social security will be lower. A recent study by Boffi et al. (2024) shows that in many European countries, the net fiscal position of intra-EU mobile citizens is greater than that of non-EU migrants. Based on our considerations regarding higher labour market competition and lower concerns about fiscal pressure, we expect that the net association between immigration and welfare state effort will be more positive in the case of intra-EU labour mobility than in the case of migration in general. However, it can be expected that this differential effect will be more pronounced in the case of benefit generosity than in the case of social expenditure, because of a mechanical effect in the latter case. Since the net fiscal position of non-EU migrants is relatively more negative, non-EU migrants may increase social expenditure because they receive more social transfers. Finally, we explore whether the association between immigration and welfare state effort differs between migration from Central and Eastern European countries8 and migration from Western-European countries9. Since the enlargement of the EU in 2004, the stock of labour migrants from CEE countries to WE countries has increased rapidly (see Table 4.2), unlike the stock of immigrants from Western European countries which has remained relatively stable (see Table 4.3). Therefore, it could be expected that increasing migration in recent years, especially from CEE countries, is responsible for perceived or observed increased labour market competition and subsequently the perceived labour market risk of individuals. As a result, we would expect that increasing CEE labour migration has increased the demand or the need for compensation through welfare state effort more than migration from Western European countries (as the stock of these migrants has remained more or less the same since 2004). 4.2.3 Economic, political, and institutional factors Alongside the effects of EU labour migration, we expect a range of other factors to play a role in determining levels of social protection. First, the degree of economic openness of a country. Previous literature tends to argue in favour of one of two leading concepts, either the efficiency hypothesis 8 Bulgaria, Croatia, Cyprus, Czechia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia, Slovenia. 9 Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Netherlands, Portugal, Spain, Sweden, Switzerland, UK. This includes the 15 pre-2004 expansion countries. Plus, EFTA countries minus Norway as Norway was excluded from the EU-LFS data provided to us.
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