The Effect of EU Immigration on Welfare Systems – Answering “Boon or Burden?” with Evidence From Denmark

The free movement of people – one of the ‘four freedoms’ of goods, capital, services and labour – is a fundamental principle of the EU’s single market, which seeks to build a borderless European economy. However, since the EU’s enlargement to the east in 2004, free movement has no longer been perceived exclusively in terms of mutual benefit. Populist politicians now compete for votes using claims of welfare tourism.  For example, the relationship between EU immigration and the British welfare state was one of the main themes of the UK’s EU referendum campaign. The argument that the UK had become a ‘honeypot nation’ for welfare-seeking EU immigrants is thought to have prompted many voters to back Brexit.

However, the debate on the impact of EU immigration on welfare systems is not unique to the UK. According  to  the  “welfare magnet”  hypothesis, migrants  with  a  high  likelihood  of  claiming  benefits cluster in the most generous welfare systems. Given that many Danes view their welfare system as being particularly generous and attractive, fears of ‘welfare magnetism’ are especially prominent in Denmark. In their latest research published in European Union Politics, Dorte Sindbjerg Martinsen (TransJudFare Project, University of Copenhagen) and Gabriel Pons Rotger from The Danish National Centre for Social Research (SFI) present results of the impact EU immigration has had on welfare spending in Denmark.

The authors conclude that EU citizens have made important contributions to financing the Danish welfare state, thus inviting us to rethink the free movement-welfare state nexus. Against current political discourse, their findings suggest that the welfare state is much less vulnerable to the impact of free movement than would dictate, and in fact that the public finances of a state can benefit from EU immigration.

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