Intra-EU Labour Mobility and the Welfare State 85 slowly than the numerator (social expenditure). The unemployment rate is negatively associated with incapacity spending and ALMPs but is otherwise insignificant. The disability rate, our control for the number of beneficiaries for incapacity spending, is (weakly) positively associated with incapacity spending in Table 6. Finally, the young dependency ratio, the control for family spending, is not statistically significant in either model. Table 4.8 presents the headline results for both indicators of intra-EU mobility on the unemployment and the social assistance replacement rates while Table 10 in the Appendix provides the full regression results. The results show that a one percentage point increase in the labour force of labour migrants from CEE member states is associated with a 1.73 point increase in the unemployment replacement rate and a 1.13 point increase in the social assistance replacement rate. In contrast, for Western European labour migrants there is no statistically significant effect on either the unemployment replacement rate or the social assistance replacement rate. Furthermore, foreign-born in general are only positively and significantly associated with social assistance replacement rates.14 Overall, these results are in line with our expectations. Labour migration from CEE member states spurs the demand for compensation in the form of unemployment benefits and social assistance benefits more than labour migration from Western Europe and migration in general. Furthermore, in contrast to the results for social expenditure, these results for replacement rates cannot be driven by a mechanical effect from migrant-beneficiaries. In addition, while we find variations across social programmes (neutral and/or positive effects), we do not find any particular patterns regarding programme design (contributory or non-contributory and targeted or universal). For example, we find positive associations between CEE labour migration and both unemployment spending and the unemployment replacement rate, which is typically a contributory benefit, but no association between either types of mobility with old age spending, a typical contributory benefit. In addition, for family spending, typically a universal benefit (for those with children) has a small, positive association, and social assistance, which is typically means-tested rather than universal, also has a positive association with CEE labour mobility. As such, the programme design does not appear to be systematically associated with EU labour migration. However, the main focus of this paper was not to assess programme design but rather the differences between types of mobility, this is a limitation of this particular analysis and would make a good avenue for future research. 14 Tables 11 and 12 in Appendix 2 show the same replacement rate regressions but for disaggregated family types. The results are driven by changes in lone person households and two parent, two children households.
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