WPS4899 P olicy R eseaRch W oRking P aPeR 4899 The Foreign-born Population in the European Union and Its Contribution to National Tax and Benefit Systems Some Insights from Recent Household Survey Data Luca Barbone Misha Bontch-Osmolovsky Salman Zaidi The World Bank Europe and Central Asia Region Poverty Reduction and Economic Management Unit April 2009 Policy ReseaRch WoRking PaPeR 4899 Abstract Despite the purported surge in internal migration background of the migrant population (both from within following the 2004 enlargement of the European Union, as well as outside the European Union), this paper finds data from the 2006 European Union Survey of Income that migrants tend to include a concentration of both and Living Conditions show that internal migrants are a low as well as highly educated workers. Both sets of relatively small share of the European Union's population. migrants uniformly contribute to raising the working-age Depending on the exact definition used, only about 1 population of receiving countries. Using data on average to 2 percent of the population of European Union-13 incomes and taxes paid and benefits received by migrant countries (members prior to the 2004 enlargement, not and non-migrant households, the authors find no including Germany and Luxembourg) were born in other evidence to support the contention that migrant workers European Union countries, while the corresponding contribute much less in taxes than the native-born share for European Union-4 countries (Poland, Hungary, population, or consume significantly higher benefits. Czech Republic, and Slovakia) is even lower. By contrast, On the contrary, our calculations suggest that migrant about 6 percent of the population of European Union- workers make a net contribution of approximately 42 13 countries was born outside the European Union. billion euros to the national tax and benefit systems of On examining the demographic and socio-economic European Union-13 countries. This paper is a product of the Poverty Reduction and Economic Management Unit, Europe and Central Asia Region. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at szaidi5@worldbank.org. The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Produced by the Research Support Team The Foreign-born Population in the European Union and Its Contribution to National Tax and Benefit Systems Some Insights from Recent Household Survey Data Luca Barbone, Misha Bontch-Osmolovsky, and Salman Zaidi* * World Bank, Washington DC. The paper was commissioned by the Czech Ministry of Labor and Social Welfare, and was presented at the EU Ministerial Conference "Strengthening EC Competitiveness ­ Potential of Migrants on the Labour Market" organized by the Czech Presidency of the Council of the EU in Prague, February 26th-27th, 2009. We would like to thank in particular Ms. Martina Michalcová and Ms. Martina Tomková, and the participants of the above-mentioned conference as well as numerous colleagues at the World Bank for helpful comments on earlier drafts. Nonetheless, the opinions and views presented here are those of the authors alone. Correspondence: Salman Zaidi, World Bank, 1818 H Street NW, Washington DC 20433, USA. E. mail: szaidi5@worldbank.org. Phone: (202) 473 1976. Fax: (202) 522 2753. TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................... 3 LIST OF TABLES....................................................................................................................... 3 1. INTRODUCTION....................................................................................................................... 4 2. DATA AND METHODOLOGICAL APPROACH............................................................................ 5 3. PROFILE OF THE EU MIGRANT POPULATION ........................................................................ 9 4. CONTRIBUTIONS OF MIGRANTS TO NATIONAL TAX AND BENEFIT SYSTEMS....................... 13 5. SELECTED COUNTRY CASES AND CONCLUDING OBSERVATIONS ........................................ 18 ANNEX TABLES ......................................................................................................................... 21 LIST OF TABLES Table 1: Number of Observations in the 2006 EU-SILC .................................................................. 6 Table 2: Population Breakdown by Derived Migration Status and Country of Residence .................. 7 Table 3: Breakdown of the Population by Age Group....................................................................... 9 Table 4: Breakdown of the Population by Highest Educational Attainment .................................... 10 Table 5: Breakdown of the Population by Employment Status........................................................ 11 Table 6: Breakdown of the Population by Employment Type ......................................................... 12 Table 7: Average Personal Earned Income and Personal Income Tax............................................. 14 Table 8: Average Benefits Receipts ................................................................................................. 15 Table 9: Average Household Demographic Composition ............................................................... 16 Table 10: Total Household Earnings, Taxes Paid, and Benefits Received........................................ 17 Table 11: Breakdown of the Population by Country and Age Group .............................................. 21 Table 12: Breakdown of the Population by Country and Highest Educational Attainment.............. 22 Table 13: Breakdown of Population by Occupational Status ........................................................... 24 Table 14: Average Benefits Collected by Working-Age Individuals ................................................. 25 Table 15: Average Benefits Collected by Individuals 16 Years and Older ........................................ 26 Figure 1: Breakdown of Population by Place of Birth ....................................................................... 8 Figure 2: Composition of the Migrant Population by Place of Birth.................................................. 8 Figure 3: Net Taxes Paid: EU13 Countries (Migrant and Non-Migrant Populations) ...................... 18 Figure 4: Net Taxes Paid: Selected Countries (Migrant and Non-Migrant Populations) ................... 19 1. INTRODUCTION In recent years, the rise in remittance flows from migrant workers to their home countries has been one of the most important sources of resource transfers for developing countries. However, despite the evident support for improving living conditions in poorer countries, international migration continues to be a contentious public policy issue in richer countries. Among the various reasons why this is so is the negative perception that migrants impose a disproportionately large fiscal burden on receiving countries, 1 because they consume a relatively larger share of social benefits and services (because they are more likely to be unemployed or have larger families, or strive hard to claim the maximum possible benefits that they possibly can, etc.) and make relatively small contributions to tax revenues (e.g. because of higher tax evasion, greater tendency to work in the informal economy, etc.) than the country's non-migrant population. The main objective of this paper is to ascertain whether evidence derived from household survey data on tax payments and benefits consumption of migrant in various countries of the European Union support this perception. The paper is organized as follows: Section 2 provides a brief description of the 2006 European Union Survey of Income and Living Conditions (EU-SILC), the primary data set used in the paper, including definitions of key variables used in the analysis as well as a summary of the proxy criteria used to identify the various EU "migrant population" sub-groups. In the remainder of the paper, the analysis focuses on five main sub-groups of interest for the main individual EU countries and other country sub-groups (in particular, the EU13 and EU4) 2: (i) the native-born population, (ii) citizens born in other EU countries, (iii) citizens born outside the EU, (iv) non-citizens that are citizens of other EU countries, and, finally, (v) non-citizens that are citizens of other non-EU countries. Section 3 provides a profile of these five population sub-groups, focusing in particular on how the relative sizes of these groups and other key characteristics (e.g. demographic composition, educational background and nature of employment, etc.) vary across the main EU countries and other country sub-groups of interest noted above. Section 4 analyzes the contributions of migrants to the national tax and benefits systems of the various EU countries where they currently live, and in particular shows that in EU13 countries as a group, there is no evidence to support the contention that migrant workers contribute much less in taxes than the native-born population, or consume significantly higher benefits. On the contrary, our calculations suggest that migrants make significant net positive contributions to the national tax and benefits systems of EU13 countries. Since the analysis also reveals considerable heterogeneity across countries, Section 5 discusses the differing experiences of Austria, Belgium, Spain, Ireland, Sweden, and the United Kingdom with regard to the differing net contributions of the various migrant sub- groups. This section also concludes by summarizing the key findings of the paper, as well as discussing the main factors that help explain the differing situation across individual EU countries. In particular, the section shows how differing receipts of retirement benefits is the main reason that explains why migrants consume significantly lower benefits compared to the native-born population. 1 See, for example, Zsolt Gal: The Paradox of European Immigration--Limited Access to the Labour Markets, Open Doors to the Swedish Table of Welfare Systems. National Bank of Poland's Journal on Economics and Finance: "Migration, Labour Market and Economic Growth in Europe after Enlargement". Warsaw 8-9 December, 2008. 2 The EU13 group comprises Austria, Belgium, Denmark, Spain, Finland, France, Greece, Ireland, Italy, Netherlands, Portugal, Sweden, and the United Kingdom, while the EU4 group comprises Poland, Czech Republic, Hungary, and Slovakia. The rationale for focusing on these specific country groups is provided later in the paper. 4 2. DATA AND METHODOLOGICAL APPROACH This paper utilizes household survey data from the 2006 European Union Survey of Income and Living Conditions (EU-SILC). The EU-SILC is an instrument aiming at collecting timely and comparable micro data on income poverty and social exclusion in countries of the European Union. This instrument is anchored in the European Statistical System, and aims to provide two types of data: (i) cross-sectional data pertaining to a given time or a certain time period with variables on income, poverty, social exclusion and other living conditions, and (ii) longitudinal data pertaining to individual-level changes over time, observed periodically typically over a four years period. The reference population of EU-SILC is all private households and their current members residing in the territory of the member states at the time of data collection. Persons living in collective households and in institutions are generally excluded from the target population, but in general the excluded population in each country is no more than 2 percent of the total national population. Box 1: Definitions of Key EU-SILC Variables Used in the Analysis Total disposable household income is the sum for all household members of gross personal income components (including gross employee cash or near cash income, gross non-cash employee income, gross cash benefits or losses from self-employment, value of goods produced for own consumption, unemployment benefits, old-age benefits, survivor benefits, sickness benefits, disability benefits, and education-related allowances) plus gross income components at the household level (including imputed rent, income from rental of a property or land, family/children related allowances, social exclusion not elsewhere classified, housing allowances, regular inter-household cash transfers received, interest dividends, profit from capital investments in unincorporated business, income received by people aged under 16) minus interest paid on mortgage, regular taxes on wealth, regular inter-household cash transfers paid, tax on income and social insurance contributions (including tax adjustments-repayment/receipt on income, income tax at source, and social insurance contributions). Per capita disposable income is computed as total disposable household income / household size. Benefits include unemployment, old-age, survivors, sickness, disability, education, family benefits, other social exclusion, and housing allowances. Taxes include regular taxes on wealth, taxes on income and social insurance contributions, as well as employer's social contributions. Four main types of data are gathered in EU-SILC: (i) variables measured at the household level; (ii) information on household size and composition and basic characteristics of household members; (iii) income and other more complex variables termed `basic variables' (education, basic labor information and second job) measured at the personal level, but aggregated to construct household- level variables; and (iv) variables collected and analyzed at the person-level termed `the detailed variables' (health, access to health care, detailed labor information, activity history and calendar of activities'). The main EU-SILC variables used in our analysis are per capita disposable income as well as data on taxes and benefits (Box 1). Further details pertaining to the specific variables included in the micro data sets, as well as the specific sample selection procedures followed in each country covered in the survey, can be found in the EU-SILC user database description. 3 All 25 EU member 4 countries were covered in the 2006 EU-SILC round. In addition to several key variables of interest noted above, the EU-SILC dataset also includes two variables of particular interest for our analysis: 3 UDB description ver 2005-4 from 15-09-07; UDB description ver 2006-1 from 01-03-08, Eurostat, Directorate F: Social Statistics and Information Society, Unit F-3: Living conditions and social protection statistics, Luxembourg. 4 Bulgaria and Romania were not yet members of the European Union in 2006. In addition, Germany and Malta were not part of the database we received from Eurostat, so are excluded from the analysis. 5 (i) country of birth, and (ii) country of citizenship, either of which could potentially be used as a proxy for migrant status. We start first by presenting in Table 1 the distribution of individuals aged 16 years and older interviewed in each EU country by country of birth and citizenship. As the table shows, the sample of observations in each country is in general fairly large, thereby permitting results derived from the dataset to be presented at a fairly high level of disaggregation. However, in much of the analysis presented in the paper, we focus mainly on presenting and comparing results for two main groups of interest: (i) the EU13 (i.e. EU 15 member countries prior to the 2004 enlargement, minus Germany and Luxemburg), and (ii) the EU4 (Poland, Hungary, Czech Republic, and Slovakia). 5 Wherever possible (and of special interest), we also present results for some individual EU countries. Table 1: Number of Observations in the 2006 EU-SILC Total number of observations (individuals aged 16 years and older) 1. Country of Birth 2. Country of Citizenship COUNTRY Within Other EU Non-EU Other EU Non-EU TOTAL Country country country Country country country Austria 10,477 510 1,023 11,163 228 584 12,010 Belgium 9,833 702 772 10,382 614 303 11,307 Cyprus 7,670 420 667 7,796 516 445 8,757 Czech Republic 14,283 413 160 14,704 83 69 14,856 Denmark 10,822 160 385 11,086 91 190 11,367 Estonia 11,190 - 1,814 11,399 - 1,608 13,004 Spain 26,600 274 1,265 27,070 159 910 28,139 Finland 21,527 250 333 21,789 146 195 22,110 France 17,309 652 1,540 18,382 377 621 19,501 Greece 11,789 134 683 12,071 71 463 12,606 Hungary 16,030 117 353 16,432 14 69 16,500 Ireland 10,326 861 291 10,853 424 201 11,478 Italy 43,678 551 1,701 44,833 131 1,011 45,930 Lithuania 9,562 37 620 10,123 14 82 10,219 Luxemburg 4,028 3,127 654 4,044 3,378 392 7,809 Latvia 7,527 - 1,544 7,344 - 1,727 9,071 Netherlands 16,370 246 637 17,041 125 73 17,253 Poland 34,417 199 277 34,847 16 30 34,893 Portugal 9,895 103 150 9,968 40 140 10,148 Sweden 11,859 597 1,019 13,014 254 207 13,475 Slovenia 24,670 - 2,265 - - - 26,935 Slovakia 12,411 179 40 12,590 27 13 12,630 United Kingdom 16,810 192 1,552 17,717 179 656 18,554 Total 359,083 9,724 19,745 344,648 6,887 9,989 388,552 The "country of citizenship" and "country of birth" can be seen to represent relatively narrow and broad bands respectively defining migrant status: almost all would agree that foreign nationals currently in the country are indeed migrants, with the possibility that many recent migrants have by now acquired citizenship of the country in which they are currently living, so are therefore missed using the relatively narrow "country of citizenship" criterion. On the other hand, while many foreign- 5 EU4 countries: Of the EU10 countries (i.e. EU member countries that joined during the 2004 enlargement), Cyprus is excluded on account of it's relatively small size, while Estonia, Latvia, Lithuania, and Slovenia are excluded because prior to the breakup of the Soviet Union, all these countries were part of larger political entities, which renders problematic the use of country of birth and citizenship as the main criteria for forming our five main analytic groups. EU13 countries: Data for Germany was excluded from the EU-SILC data set we received from Eurostat. In addition, we also exclude Luxemburg from the analysis because we suspect that migrants in Luxemburg are fundamentally different from migrants in the other EU countries. As Table 1 shows, the share of migrants in Luxemburg is several times higher than in other EU countries. 6 born people may indeed have been migrants at some stage, the actual move to the present country may have taken place quite some time back, with the result that many classified as migrants using the relatively broad "country of birth" criterion do not in fact conform to the notion many people have in mind when they think of migrants. After considering various possible alternatives, we used the information from both sets of variables to divide the sample population into five main groups of interest: (i) native-born population, (ii) citizens born in other EU countries, (iii) citizens born outside the EU, (iv) non-citizens from other EU countries, and (v) non-citizens born outside the EU. The distribution of the EU-SILC sample into these five main groups is presented in Table 2. Using a relatively narrow definition of migrants--classifying as migrants all non-citizens in any given country--migrants comprise less than 5 percent of the population of the EU13 (less in the EU4). Even using a relatively broad definition--classifying as migrants all those (i.e. regardless of their citizenship) born outside the country where they currently reside--migrants constitute less than 10 percent of the population of EU13 countries. By contrast, the foreign-born population constitutes about 13 percent of the total population of the United States (i.e. not including the much larger share of internal migrants within the country). 6 Overall, about 2 percent and 9 percent of the population of EU4 and EU13 countries respectively were born outside their current country of residence. As illustrated in Figure 1, this share varies considerably across individual EU countries, from more than 15 percent in Austria to less than 2 percent in Poland and Slovakia. Table 2: Population Breakdown by Derived Migration Status and Country of Residence Percent of the population 16+ years: 1. 2. 3. 4. COUNTRY Native-born Citizens born in Citizens Non-citizens Non-citizens Population other born outside from other EU born outside EU countries the EU countries the EU Austria 85 3 4 2 6 Belgium 88 2 3 4 3 Denmark 95 0 1 1 3 Spain 95 1 1 1 3 Finland 97 1 1 0 1 France 88 2 4 2 3 Greece 93 1 2 0 4 Ireland 89 4 1 4 2 Italy 94 1 1 0 4 Netherlands 94 1 4 1 1 Portugal 97 1 1 0 1 Sweden 88 3 5 2 2 United Kingdom 89 0 6 1 4 Total EU 13 countries 91 1 3 1 3 Czech Republic 96 2 1 0.5 0.7 Hungary 97 1 2 0.1 0.5 Slovakia 98 1 0.3 0.2 0.1 Poland 99 1 1 0.0 0.1 Total EU 4 countries 98 1 1 0.1 0.3 Note: Totals across rows may not add to 100 because of rounding. 6 US Census Bureau: 2006 American Community Survey, as cited on www.migrationinformation.org. 7 Figure 1: Breakdown of Population by Place of Birth 100% Share of the population (%) 95% 90% 85% 80% Denmark EU13 EU4 Czech Rep. Portugal UK Belgium France Ireland Greece Finland Slovakia Poland Italy Hungary Netherlands Spain Austria Sweden Born in country Born outside the country Within the group of migrants thus broadly defined, it is instructive to look at the breakdown of migrants by place of birth (Figure 2). Migrants (broadly defined as those born outside their current country of residence), born outside the EU outnumber those born within the EU by roughly 3 to 1 in EU 13 countries (i.e. sum of yellow bars 2 and 4 vs. sum of blue bars 1 and 3). Thus, despite the purported rise in numbers post-2004, the scale of internal migration in the EU remains quite small. Figure 2: Composition of the Migrant Population by Place of Birth 14 12 Share of the population (percent) 10 8 6 4 2 0 Czech Rep. Italy Hungary Slovakia UK Portugal Austria France Sweden Greece Spain Finland Poland EU13 EU4 Ireland Netherlands Denmark Belgium 1. Citizens born in other EU countries 2. Citizens born outside the EU 3. Non-citizens from other EU countries 4. Non-citizens born outside the EU 8 As illustrated in Figure 2, the distribution of migrants by country of origin varies considerably across individual EU countries: Austria, United Kingdom, and France have the largest proportion of migrant population born outside the EU, followed by Sweden and Belgium. At the other end of the spectrum, countries where migrants from other EU countries constitute a sizeable share of the population include Ireland (over 8 percent), Belgium (6 percent), Sweden and Austria (around 5 percent). Ireland and Slovakia are the only EU countries where the number of migrants born in other EU countries exceeds the number of migrants from outside the EU. 7 3. PROFILE OF THE EU MIGRANT POPULATION Age and Demographic Composition: Countries in Eastern Europe and the former Soviet Union are experiencing rapidly aging populations, a phenomenon posing significant economic and social challenges due to rising health care expenditures and public pension payments to the elderly. 8 EU countries are no different in this respect, in that a rapid shift is currently underway in the age structure of their populations: presently every sixth EU citizen is over 65 years of age; this share is projected to rise to one-fifth by 2020, and as high as one-fourth to one-third by 2050. 9 While mass immigration may not be a viable policy tool to reverse the trend of the aging EU population, it is nonetheless informative to compare the demographic composition of EU migrant and non-migrant groups. The 2006 EU-SILC data clearly illustrate the aging challenge confronting both EU4 and E13 countries: 29 percent and 35 percent respectively of the native-born populations aged 16+ years are 56 years or older in these country groups (Table 3). Non-citizens born outside the EU (i.e. group 4) help raise the stock of working-age population in both EU13 and EU4 countries, with more than four-fifths (88 percent and 92 percent respectively) falling in the 16-55 yr age groups. Table 3: Breakdown of the Population by Age Group 1. 2. 3. 4. Native-born Citizens born Citizens born Non-citizens Non-citizens Population in other outside the from other EU born outside EU countries EU countries the EU EU 13 16-20 years 6 4 4 2 5 21-55 years 59 52 65 64 83 56+ years 35 44 31 34 12 Total 100 100 100 100 100 EU 4 16-20 years 7 1 2 6 4 21-55 years 63 26 25 69 88 56+ years 29 73 73 25 9 Total 100 100 100 100 100 In Austria and Belgium, citizens born outside the EU as well as all non-citizen migrants (i.e. groups 2-4) tend to be younger than the rest of the population (Annex Table 11). 7 Given the small number of observations in some cells of Table 2 (and therefore relatively large standard errors of the resultant estimates), the remainder of the paper presents country-level breakdowns for the larger EU countries only. 8 See Chawla, M. Gordon Betcherman, and Arup Banerji (2007): From Red to Gray: The Third Transition of Aging Populations in Eastern Europe and the former Soviet Union, World Bank, Washington DC. 9 "Economic Migration, Social Cohesion and Development: Towards and Integrated Approach". Thematic report prepared for the 8th Council of Europe Conference of Ministers Responsible for Migration Affairs, Kyiv, September 2008. 9 In Spain, Ireland, and Italy, all migrants (i.e. groups 1-4) tend to be younger than the native- born population. In France, by contrast, only non-citizens born outside the EU (i.e. group 4) tend to be younger than the rest of the country's residents. Finally, in Sweden and the United Kingdom, migrants from outside the EU (both citizen and non-citizens) tend to be younger than the rest of the country's population. Educational Background: Do migrant workers have more or less education than the native- born population? It turns out there is no simple answer to this question, but rather that it depends on a number of factors, such as place of origin, migrant sub-group, place of residence, etc. In EU13 countries overall, citizens born in other EU countries as well as in countries outside the EU have a fairly similar educational attainment profile as the native-born population, the exception being that citizens that were born outside the EU are somewhat more likely to have tertiary education (and correspondingly are somewhat less likely to have primary education or below (Table 4). Table 4: Breakdown of the Population by Highest Educational Attainment 1. 2. 3. 4. Population (percent) Native-born Citizens born Citizens born Non-citizens Non-citizens with level of education Population in other outside the from other born outside indicated EU countries EU EU countries EU EU 13 Primary and below 24 26 16 32 24 Lower secondary 21 19 21 12 21 Upper secondary 31 33 30 25 26 Post secondary 3 4 5 4 6 Tertiary 21 19 28 27 23 Total 100 100 100 100 100 EU 4 Primary and below 14 20 28 3 2 Lower secondary 6 19 8 16 15 Upper secondary 62 51 47 59 61 Post secondary 3 1 2 3 1 Tertiary 14 10 15 20 22 Total 100 100 100 100 100 Non-citizens born in other EU countries, by contrast, have a disproportionately high share of people with either primary or lower education, or with tertiary and higher education (i.e. a more spiked bimodal distribution as compared to other groups). In EU4 countries, by contrast, the foreign-born citizens group has a higher share of people with relatively low educational attainment, while the foreign-born non-citizens groups have a relatively higher share of those with tertiary education as compared to other sub-groups. However, this aggregate picture for the EU13 overall described above conceals considerable diversity at the level of each individual country, as described below (see Annex Table 12): In Austria, migrants born outside the EU (both citizens as well as non-citizens) tend to have lower educational attainment than the rest of the population; by contrast, those from other EU 10 countries (once again both citizens as well as non-citizens) are more likely to have tertiary education than their compatriots born elsewhere. In Belgium, non-citizen migrants born outside the EU have a higher share of those with primary/less education as well as tertiary education as compared to other migrant groups (i.e. a more spiked bimodal distribution). In Spain, the native-born population has a higher share of those with primary or lower education compared to the rest of the population--the reverse is true in France. In Ireland, the non-native born population is disproportionately likely to have tertiary education, as are United Kingdom residents born outside the EU (both citizens and non-citizens). Employment: Turning next to the employment status of different population sub-groups, the native born population in EU13 countries tends to be slightly more likely than migrants (i.e. groups 1-4) to be in full time employment (Table 5). Table 5: Breakdown of the Population by Employment Status Austria Belgium Spain France Greece Ireland Italy Sweden UK EU 4 EU 13 Native-born Population Working full time 63 62 63 67 64 57 61 69 64 65 63 Working part-time 14 17 7 13 6 15 8 15 16 4 12 Unemployed 5 7 9 7 9 5 8 3 3 12 6 Other 18 14 21 13 21 23 23 13 17 19 19 Total 100 100 100 100 100 100 100 100 100 100 100 1. Citizens born in other EU countries Working full time 69 46 62 67 61 57 50 73 ... 63 59 Working part-time 7 18 7 13 3 14 7 13 ... 3 12 Unemployed 8 10 8 1 12 7 11 1 ... 18 6 Other 16 26 23 19 24 22 32 13 ... 16 23 Total 100 100 100 100 100 100 100 100 ... 100 100 2. Citizens born outside the EU Working full time 58 45 66 58 59 ... 58 56 58 70 56 Working part-time 11 13 9 14 9 ... 5 14 16 5 14 Unemployed 12 19 12 11 14 ... 9 9 2 8 9 Other 19 23 13 17 18 ... 28 21 24 17 21 Total 100 100 100 100 100 ... 100 100 100 100 100 3. Non-citizens from other EU countries Working full time 51 56 64 70 39 69 51 69 59 66 62 Working part-time 13 11 7 12 7 9 7 15 15 4 12 Unemployed 9 11 9 4 1 5 8 6 12 8 7 Other 27 22 20 14 53 17 34 10 14 22 19 Total 100 100 100 100 100 100 100 100 100 100 100 4. Non-citizens born outside the EU Working full time 52 41 66 39 65 46 64 40 55 71 55 Working part-time 11 11 11 14 9 10 9 10 13 5 11 Unemployed 13 11 10 18 4 11 9 17 6 9 10 Other 24 37 13 29 22 33 18 33 26 15 24 Total 100 100 100 100 100 100 100 100 100 100 100 Note: computed for population aged 21-55. ... too few observations to permit reliable estimates to be derived. In Austria, Belgium, and Italy, migrants tend generally to be less likely to be in full-time employment and more likely to be unemployed than the native-born population. In Spain and EU4 countries, the employment profiles of all population sub-groups (i.e. migrants and non-migrants) tend to be quite similar. 11 In France and Sweden, non-citizens from outside the EU stand out compared to other population sub-groups in having a relatively poor employment profile (i.e. low share of full-time employment, high share of unemployed) compared to other population groups. In the United Kingdom, migrants are much less likely to be in full-time employment than the native-born population; while non-citizens are more likely to be unemployed than other groups, this is not necessarily so for citizens born in other EU countries or outside the EU. Do working migrants and non-migrant groups have different occupation and employment types? Table 6 shows that in EU13 countries, migrants generally tend to be employees rather than self- employed (in particular non-citizens outside EU). In addition, migrant workers tend to work in blue- collar occupations like construction, mining and salesmen (Annex Table 13), whereas native-born workers have a higher fraction of white-collar jobs. Sweden stands out as an exception: there fraction of self-employed is higher among migrant workers than among the native born workers. In Spain, we observe a higher share of self-employed workers that have own employees among the non-citizen migrants from within the EU than among the native-born population. Among the EU4 countries there is a substantially higher fraction of family workers among the fourth group of migrants. Table 6: Breakdown of the Population by Employment Type Austria Belgium Spain France Greece Ireland Italy Sweden UK EU 4 EU13 Native-born population self-employed with employees 7 3 4 3 5 5 6 4 2 3 4 self-employed w/o employees 4 8 10 5 22 10 16 5 8 12 10 employee 89 89 85 92 67 85 76 91 89 83 86 family worker 0 0 0 0 5 0 2 0 0 2 1 Total 100 100 100 100 100 100 100 100 100 100 100 1. Citizens born in other EU countries self-employed with employees 9 1 8 2 6 5 6 6 ... 3 5 self-employed w/o employees 9 5 12 5 26 10 10 3 ... 11 8 employee 82 93 80 93 66 85 80 91 ... 85 86 family worker 0 2 0 0 2 0 4 0 ... 1 1 Total 100 100 100 100 100 100 100 100 ... 100 100 2. Citizens born outside the EU self-employed with employees 5 2 2 3 4 ... 7 5 4 7 4 self-employed w/o employees 3 9 10 9 18 ... 17 6 11 14 10 employee 92 89 87 87 77 ... 75 90 85 78 86 family worker 0 0 0 2 1 ... 1 0 0 0 1 Total 100 100 100 100 100 ... 100 100 100 100 100 3. Non-citizens from other EU countries self-employed with employees 7 2 10 4 0 1 7 2 6 3 4 self-employed w/o employees 9 8 20 4 25 4 12 10 2 10 7 employee 83 90 70 90 70 92 81 88 92 87 88 family worker 1 0 0 2 6 2 0 0 0 0 1 Total 100 100 100 100 100 100 100 100 100 100 100 4. Non-citizens born outside the EU self-employed with employees 0 5 2 2 2 2 4 4 1 5 2 self-employed w/o employees 3 8 5 4 11 2 9 13 7 15 7 employee 96 87 92 94 86 95 87 83 92 73 91 family worker 0 0 1 0 1 0 0 1 0 7 0 Total 100 100 100 100 100 100 100 100 100 100 100 ... too few observations to permit reliable estimates to be derived. 12 4. CONTRIBUTIONS OF MIGRANTS TO NATIONAL TAX AND BENEFIT SYSTEMS How much do migrants typically earn? How much do they pay in taxes and consume in benefits?--how do these estimates compare to corresponding statistics for the non-migrant population? These and other such questions are examined in more detail in this section. Estimating the fiscal impact of migrants: Estimating the size and composition of the migrant population using data from household surveys has a long and well-established tradition, with data from labor force surveys typically used to estimate and compare the demographic composition of native-born and migrant population groups. An added benefit of using survey data is that the migrant population as a whole can often be a heterogeneous group, and the survey data allow for a disaggregated examination of differences across different subgroups in the main variables of interest. In order to estimate the net fiscal impact of migrants on a given country's budget, in addition to information on the size and composition of non-migrant and migrant groups, comprehensive data are also needed both on non-migrants' and migrants' consolidated contributions to overall public revenues (i.e. total taxes paid, both direct as well as indirect, contributions paid to the domestic social security system, etc.) as well as their share of consumption of overall public expenditures (i.e. direct benefits received, public goods and services consumed, etc.). Such country-level studies are relatively rare in number. In the United Kingdom, a 2002 Home Office research study found that in 1999/00, first generation migrants in the UK made a net fiscal contribution of 2.5 billion pounds a year. 10 More recent work by the Institute for Public Policy Research found that migration to the UK has a positive and growing impact on the public finances: migrants contributed an estimated 10 percent of government receipts, and accounted for 9.1 percent of government expenditure. 11 In addition to the fairly onerous data requirements to carry out country-level analysis, an additional complicating factor is that ideally the fiscal contribution of migrants should be considered in both the short- and long-run. In one of the relatively rare such studies available, immigrants to the United States were estimated to make a contribution of around $80,000 to the US fiscal system in net present value terms in 1996 dollars. 12 However, while the surplus was quite large (and positive) for highly skilled migrants, it was estimated to be slightly negative for migrant individuals with less than secondary high school level, thus suggesting that the educational and skills profile of migrants was likely an extremely important determining factor. Comparing the fiscal impact of migration across countries is even more difficult, as estimates for different countries are sensitive to definitions employed, timing of comparison, as well as duration of the period over which the comparison is being made, as the structure and behavior of the migrant population is subject to change over time in response to changing circumstances and conditions. In this regard, the EU-SILC data set is a particularly useful data set for the purposes of such a cross- country comparison, given the emphasis according to ensure comparability of concepts and definitions applied across countries. Moreover, it is one of the few data sets available in which 10 Gott & Johnston (2002) The Migrant Population in the UK: fiscal effects. Home Office RDS Occasional Paper No. 77. 11 Sriskandarajah, Cooley, and Reed 92005) Paying their way: the fiscal contribution of immigrants in the UK, IPPR, as cited in "The Economic and Fiscal Impact of Immigration, Home Office, United Kingdom, October 2007. 12 Smith and Edmonston (eds) (1997) The New Americans: Economic, Demographic, and Fiscal Effects of Immigration, Washington DC. National Research Council, National Academy Press, cited in ibid. 13 comprehensive income data are available, including information on taxes paid and benefits received, plus the migrant and non-migrant population groups can be compared over the same time periods. On the flipside, there are two main shortcomings of using the EU-SILC data for these comparisons. First, despite the fact that the survey contains fairly comprehensive data on tax and benefit receipts, coverage of these is nonetheless still incomplete. For instance, indirect taxes paid (e.g. value-added taxes) are impossible to estimate from such data, as is the consumption of public goods (e.g. use of highways, national parks, etc.). Second, data are typically available for a limited time period (e.g. one year), thus making it difficult to make comparisons across the various sub-groups of interest over a longer time period without making relatively strong assumptions. Finally (though this is a point that applies to all such studies, whether based on the SILC or on any other data set), an important point to bear in mind is that the "economic contribution of migrants" is a much broader concept than the relatively narrow "net fiscal impact" definition employed in this study. However, bearing all these caveats in mind, it is nonetheless informative to compare and contrast estimates of earnings, taxes paid, and benefits received derived using the 2006 EU-SILC data set. We start by presenting some summary statistics on average personal gross earnings and average income taxes paid on those earnings in selected EU countries, as well as how these amounts vary across the five main sub-groups of interest (Table 7). 13 Table 7: Average Personal Earned Income and Personal Income Tax Euros per year Austria Belgium Spain France Ireland Sweden UK EU 4 EU13 Average Personal Earned Income Native-born population 21,430 23,074 12,474 19,193 23,593 22,837 26,373 4,093 20,790 1. Citizens born in other EU countries 23,338 19,825 12,617 18,768 24,519 24,284 ... 4,445 20,489 2. Citizens born outside the EU 16,187 15,293 11,169 18,874 ... 14,667 25,419 6,013 20,166 3. Non-citizens from other EU countries 20,442 23,373 10,785 20,811 22,965 15,361 28,656 5,873 21,226 4. Non-citizens born outside the EU 12,721 13,268 9,575 10,644 17,140 8,310 22,347 4,329 14,970 All migrants (i.e. groups 1-4) 15,766 17,754 10,278 16,038 22,001 15,089 24,097 4,929 18,072 Average Personal Income Tax Native-born population 6,273 7,736 2,292 N/A 5,071 7,148 7,280 1,135 5,375 1. Citizens born in other EU countries 7,032 6,843 2,306 N/A 5,329 7,483 ... 1,057 6,050 2. Citizens born outside the EU 4,247 4,886 1,716 N/A ... 4,487 7,504 1,752 6,039 3. Non-citizens from other EU countries 7,203 7,736 1,944 N/A 4,781 4,854 7,944 1,492 6,087 4. Non-citizens born outside the EU 3,247 4,509 1,382 N/A 2,987 2,578 6,301 964 4,287 All migrants (i.e. groups 1-4) 4,180 5,532 1,569 N/A 4,337 4,567 6,630 1,042 4,973 Note: Computed over all adults aged 21-55 years, regardless of employment status. Average personal earned incomes for France are not comparable to other countries, as data on taxes paid are not available (i.e. only have earnings net of taxes). ... too few observations to permit reliable estimates to be derived. Personal earnings and income taxes: In EU13 countries, average earnings of the various population groups are quite similar, with one notable exception: non-citizens born outside the EU (group 4) have substantially lower earnings than others (about 70 percent of average earnings of other groups). Non-citizen migrants in France and Sweden born outside the EU stand out in this respect, as their average earnings are only 52 percent and 36 percent of what non-migrants earn in these respective countries (Table 7). 14 Having lower earnings on average, these migrants tend to pay 13 Income tax is calculated as a difference between reported gross and net earnings for individuals. Income tax information was not available for Denmark, Finland, France, Greece, Italy, Netherlands, Portugal, Hungary and Slovakia. 14 Part of the difference in earnings can be explained by the differing profile: as noted earlier, these migrants tend to have lower rates of employment and higher share of lower-educated blue-collar workers than native-born population. 14 lower income taxes than other groups: about one thousand euros less than the native born population. Sweden (and France) shows the biggest difference between earnings of natives and migrants: for instance, group 4 migrants in Sweden earn about fourteen thousand euros per year less than the native-born population, and correspondingly pay about four thousand euros less in income taxes per year. In the EU4 countries, by contrast, migrants tend to have higher earnings on average than the native born population, a finding consistent with the education and occupation profile of migrants in these countries. However, in the cases of taxes paid by these groups, no such clear pattern is evident: while citizens born outside the EU as well as non-citizens from other EU countries tend to pay higher amounts of taxes on average than the native-born population, the converse is true for citizens born in other EU countries as well as non-citizens born outside the EU. Table 8: Average Benefits Receipts Euros per year Austria Belgium Spain France Ireland Sweden UK EU 4 EU13 Total Benefits Native-born population 6,414 5,093 2,375 5,400 4,417 6,577 5,018 1,083 4,822 1. Citizens born in other EU countries 12,414 4,858 1,286 8,321 4,007 9,561 ... 2,476 7,666 2. Citizens born outside the EU 4,352 3,643 1,719 6,604 ... 6,124 4,357 2,470 5,064 3. Non-citizens from other EU countries 4,660 4,803 2,259 4,638 2,519 4,159 4,334 904 4,306 4. Non-citizens born outside the EU 2,378 3,984 327 3,391 2,943 5,135 1,974 351 2,311 All migrants (i.e. groups 1-4) 4,954 4,307 908 5,535 3,126 6,231 3,645 2,103 4,291 Note: Computed over the population aged 16 years and older. ... too few observations to permit reliable estimates. Personal benefits: Summary statistics on average benefits receipts by the migrant and non- migrant working-age populations are presented in Table 8 for selected EU countries. 15 Unlike the case of average incomes and taxes described above, the picture of benefits received by the various groups is somewhat more complex. On the one hand, in both the EU4 and EU13 country groups, citizens born outside the country consume more benefits than the native-born population group while the opposite is true of non-citizens born outside these countries. The overall average for EU13 countries conceals considerable differences across individual countries. Citizens of Austria, France, and Sweden born in other EU countries consume considerably higher benefits than the native-born populations in these respective countries (Table 8); this is not true for other countries. Similarly, France is the only country where the "citizens born outside the EU" group in fact consumes higher benefits than the native-born population. Finally, non-citizen migrant groups in all countries in Table 8 collect, on average, lower benefits than the respective native-born populations. To sum, the evidence presented in tables 7 and 8 does not support the contention that migrants contribute less overall to the national tax and benefit systems of the countries where they reside. In EU13 countries as a whole, migrants do appear to pay slightly lower taxes on average, but they also consume lower benefits than the native-born population. While the "non-citizens born outside the EU" group pays lower taxes on average than the native-born population, this group also consumes significantly lower total benefits than other groups. 15 These benefits include unemployment, retirement and early retirement pension, survivor's pensions, sickness and disability benefits, education, housing allowances, child-support benefits and social-exclusion benefits. 15 Household-level Analysis based on 2006 EU-SILC data: The analysis presented so far has tended to focus at the level of individuals of working-age: is the picture significantly different at the household-level? For instance, if migrant households tend to be much larger than non-migrant households, or if they have much fewer earning members, the above analysis may have distorted the true picture. Before examining the above set of statistics--earnings, taxes, and benefits--at the per- capita level (i.e. averaged over all household members), we turn first to comparing the demographic composition of migrant and non-migrant households (Table 9). Average household sizes of migrant households, both of those born within as well as outside the EU, are indeed somewhat larger than households with no migrants in EU 13 countries (2.6 and 2.8 vs. 2.4 persons per household respectively). However, while migrant households tend to have more children than households with no migrants, they also have a higher number of persons of working-age population, and tend to have fewer elderly people (Table 9). Therefore the number of dependents (children plus elderly) expressed as a ratio of the number of working-age population tends to be quite similar across these groups. In EU4 countries, the pattern is reversed: migrant households tend to have fewer children and more elderly compared to non-migrant households, and relatively fewer people of working-age population. Table 9: Average Household Demographic Composition Average number of people in designated age-group Austria Belgium Spain France Ireland Sweden UK EU 4 EU13 Households with no migrants # aged 0-20 years 0.5 0.5 0.6 0.6 0.9 0.6 0.5 0.7 0.5 # aged 21-55 years 1.1 1.1 1.4 1.0 1.3 0.9 1.1 1.4 1.1 # aged 56+ years 0.6 0.6 0.8 0.6 0.6 0.6 0.7 0.6 0.7 Total household size 2.3 2.2 2.8 2.2 2.8 2.0 2.3 2.8 2.4 A. Households with migrants born in EU-countries # aged 0-20 years 0.4 0.7 0.8 0.5 1.2 0.5 0.6 0.4 0.6 # aged 21-55 years 1.0 1.3 1.6 1.0 1.7 0.9 1.2 1.1 1.2 # aged 56+ years 0.7 0.6 0.5 0.8 0.3 0.7 0.8 1.1 0.7 Total household size 2.2 2.5 2.9 2.4 3.2 2.2 2.6 2.6 2.6 B. Households with migrants born in non-EU countries # aged 0-20 years 1.0 1.1 1.0 0.9 1.1 1.1 0.9 0.4 0.9 # aged 21-55 years 1.7 1.6 1.9 1.3 1.8 1.4 1.6 0.9 1.5 # aged 56+ years 0.3 0.3 0.3 0.6 0.2 0.3 0.4 1.0 0.4 Total household size 3.0 3.0 3.2 2.8 3.0 2.8 2.9 2.4 2.8 Table 10 summarizes total earnings as well as all reported taxes and benefits received by households for the various population sub-groups of interest. 16 Entries in the row labeled "net taxes" are the difference between total taxes paid and total benefits received by the household--i.e. a positive value indicates that households in the groups are net tax contributors while a negative value shows the opposite is true (i.e. households are net recipients of benefits). 16 Unlike table 7, which reported income tax only, taxes in Table 10 include income tax, tax on property and wealth, and employer's social contributions. Similarly, total earnings additionally include income from property, interests and dividends, and income earned by persons under 16 years old. Finally, total benefits include all individual and household level benefits. All terms are calculated on a per capita basis to aid comparability across the different population sub-groups 16 Table 10: Total Household Earnings, Taxes Paid, and Benefits Received All amounts in euros per capita per year Austria Belgium Spain Ireland Sweden UK EU 4 EU13 Households with no migrants: Gross Earned Income 12,654 13,179 7,675 13,646 13,743 15,726 2,429 12,926 Benefits 5,609 4,424 2,073 3,896 5,516 4,339 906 3,961 Taxes 4,353 4,595 1,315 2,779 6,005 4,866 703 4,108 Net income 13,910 13,007 8,433 14,763 13,254 15,199 2,632 12,779 Net taxes -1,256 171 -758 -1,117 489 527 -203 147 Number of observations 5,047 4,799 11,229 4,995 5,723 8,661 33,766 64,377 1. Households with citizens born in other EU countries Earned Income 10,684 12,164 8,992 13,108 13,208 ... 1,979 12,312 Benefits 9,621 4,204 1,561 2,914 6,979 ... 1,600 5,076 Taxes 5,172 4,387 1,671 2,572 6,247 ... 557 4,334 Net income 15,133 11,981 8,882 13,451 13,941 ... 3,022 13,054 Net taxes -4,449 183 110 -342 -732 ... -1,043 -742 Number of observations 276 216 124 394 337 ... 719 1,784 2. Households with citizens born outside the EU Earned Income 9,247 9,719 7,850 ... 8,956 15,056 2,009 12,866 Benefits 3,361 2,818 1,445 ... 4,357 3,090 1,848 3,157 Taxes 2,632 3,100 1,277 ... 3,753 4,534 682 4,018 Net income 9,976 9,438 8,018 ... 9,561 13,611 3,175 12,005 Net taxes -729 282 -168 ... -604 1,444 -1,166 861 Number of observations 323 343 280 ... 491 730 542 2,950 3. Households with non-citizens from other EU countries Earned Income 14,262 14,172 8,010 15,293 11,410 15,294 4,124 13,856 Benefits 3,357 3,136 1,342 2,334 3,057 2,933 855 2,815 Taxes 4,263 4,644 1,468 3,026 4,442 4,390 1,016 4,228 Net income 13,357 12,663 7,884 14,601 10,025 13,837 3,964 12,443 Net taxes 906 1,508 126 692 1,385 1,457 161 1,413 Number of observations 165 353 106 284 168 96 103 1,423 4. Households with non-citizens born outside the EU Earned Income 9,271 9,187 6,850 10,773 7,332 16,544 3,128 12,576 Benefits 2,336 2,842 435 2,715 3,983 1,961 490 1,842 Taxes 2,378 2,943 948 1,783 3,022 4,828 767 3,482 Net income 9,230 9,085 6,337 11,705 8,293 13,678 2,850 10,937 Net taxes 42 101 513 -932 -961 2,867 277 1,640 All households with migrants (i.e. groups 1-4) Earned Income 10,506 11,540 7,461 13,635 10,363 15,925 2,225 12,995 Benefits 4,185 3,177 938 2,674 4,822 2,896 1520 2,978 Taxes 3,366 3,806 1184 2,645 4,474 4,794 643 3,990 Net income 11,325 10,910 7,215 13,663 10,711 14,027 3,102 11,982 Net taxes -819 630 246 -28 -348 1,898 -877 1,012 Number of observations 976 1,052 918 841 1,080 1,237 1,457 7,692 Note: Computed on a per-capita basis. ... too few observations to permit reliable estimates. The key summary statistic "Net taxes" is presented in Figure 3 for different population sub- groups of interest. The 2006 EU-SILC data show that an average household in EU13 countries with no migrants pays net taxes of 147 euros per capita per year ( 4,108 total taxes minus 3,961 total benefits). By this measure, households with citizens born in other EU countries are the biggest beneficiaries of the national tax and benefits systems, receiving net benefits of 742 euros per year. However, this group is not very large, comprising about 1 percent of the total population of EU13 countries. As Figure 3 shows, all other migrant groups in EU13 countries are significant net- contributors to the national tax and benefit systems. Households with citizens born outside the EU pay 861 euros per capita more in taxes than they receive in benefits. Households with non-citizen migrants are even larger net contributors, paying 1,413 and 1,640 euros per capita per year on average, depending upon whether the country of origin is within or outside the EU respectively. 17 Moreover, as shown earlier in Figure 2, these two population sub-groups account for the bulk of all migrants in EU13 countries (about 6 percent of the total population of EU13 countries). Figure 3: Net Taxes Paid: EU13 Countries (Migrant and Non-Migrant Populations) 2,000 1,640 1,500 1,413 1,012 Euros per capita per year 1,000 861 500 147 -742 0 Households with 1. Households 2. Households 3. Households 4. Households All households no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants -500 in other EU outside the EU from other EU born outside the (Groups 1-4) countries countries EU -1,000 Summing "net taxes paid" across the four migrant groups, our calculations suggest that taken together migrants make a net contribution of approximately 42 billion euros to the national tax and benefit systems of EU13 countries. 5. SELECTED COUNTRY CASES AND CONCLUDING OBSERVATIONS Belgium and the United Kingdom stand out in comparison to other countries presented in Figure 4 in terms of the low "net benefits" accruing to households living in these countries. Figure 4 also highlights some interesting differences across countries in the pattern of net benefit receipts. Sweden stands out as being the only country where migrant households tend to be net beneficiaries--households with non-citizen migrants from other EU countries are the only sub- group in Sweden whose net contribution to the national tax and benefits system is in fact greater than that of the "households with no migrants" group. In virtually all other country cases presented in Figure 4, the reverse is true--i.e. migrant households tend to contribute more to the national tax and benefits system than households with no migrants. 17 17 The "households with citizens born in other EU countries" in Austria is the only exception. 18 Figure 4: Net Taxes Paid: Selected Countries (Migrant and Non-Migrant Populations) Austria Belgium 1,000 906 2,000 -1,256 -4,449 -729 42 -819 1,508 Households with 1. Households 2. Households 3. Households 4. Households All households 1,500 no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants Euros per capita per year in other EU outside the EU from other EU born outside the (Groups 1-4) Euros per capita per year -1,000 countries countries EU 1,000 630 500 -3,000 282 171 183 101 0 Households with 1. Households 2. Households 3. Households 4. Households All households no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants in other EU outside the EU from other EU born outside the (Groups 1-4) -5,000 -500 countries countries EU Spain Ireland 1,000 1,000 692 513 500 500 Euros per capita per year Euros per capita per year 246 -1,117 -342 Too few obs. -932 -28 126 0 110 -758 -168 Households with 1. Households 2. Households 3. Households 4. Households All households 0 no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants Households with 1. Households 2. Households 3. Households 4. Households All households in other EU outside the EU from other EU born outside the (Groups 1-4) no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants -500 countries countries EU in other EU outside the EU from other EU born outside the (Groups 1-4) countries countries EU -500 -1,000 -1,000 -1,500 Sweden United Kingdom 1,500 1,385 3,000 2867 2,500 1,000 1898 2,000 Euros per capita per year Euros per capita per year 489 1457 500 1444 1,500 -732 -604 -961 -348 1,000 0 Households with 1. Households 2. Households 3. Households 4. Households All households 527 no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants 500 in other EU outside the EU from other EU born outside the (Groups 1-4) -500 countries countries EU Too few obs. 0 Households with 1. Households 2. Households 3. Households 4. Households All households no migrants with citizens born with citizens born with non-citizens with non-citizens with migrants -500 in other EU outside the EU from other EU born outside the (Groups 1-4) -1,000 countries countries EU In virtually all the EU countries covered in Figure 4, non-citizen migrants from other EU countries contribute significantly more money to the national tax and benefits systems as compared to the native-born population. For instance, Ireland, Sweden, and the United Kingdom were the three main EU15 countries that did not impose restrictions on migrants from EU10 countries following the 2004 EU enlargement, and consequently were the main destinations of choice for emigrants from EU10 countries. As Figure 4 clearly shows, the "non-citizen migrants from other EU countries" in all three countries pay significantly higher "net taxes" as compared to the non-migrant population. On examining more closely possible reasons why, we find that differences in retirement 19 benefits received by these two sets of groups almost single-handedly help explain the observed differences: migrants tend to be considerably younger than the non-migrant population, with a much lower share of household members of retirement age; as a result, they receive significantly lower retirements benefits than the native-born population (Annex Table 15). With regard to non-citizen migrants from outside the EU, we find that this group also tends to receive significantly lower net benefits compared to the native-born population in most countries, the exceptions being Ireland and Sweden (Figure 4). The contrast between the non-citizen non-EU migrant groups in Austria and the United Kingdom is instructive: as noted earlier in Section 1, of all EU members, these countries have the largest proportion of migrant population born outside the EU. However, while such migrants in Austria tend to have relatively low educational attainment in relative to the rest of the population, the opposite is true for such migrants in the United Kingdom: as Annex Table 11 shows, 46 percent of non-citizen non-EU migrants in Austria have lower secondary education; by contrast, almost half the corresponding migrant group in the United Kingdom have completed tertiary or higher education (Annex Table 11). These differences in educational attainment (and consequently nature of employment taken up) of these two groups go a long way in helping to explain why such migrants make a significantly larger contribution to the national tax and benefit system in UK as compared to Austria. To sum, despite the purported surge in internal migration following the 2004 round of EU enlargement, the 2006 EU-SILC data show that internal migrants are a relatively small share of the EU's population: depending on the exact definition used, only about 1-2 percent of the population of EU13 countries were born in other EU countries, while the corresponding share for EU4 countries is even lower. By contrast, about 6 percent of the population of EU13 countries was born in other non-EU countries. On examining the demographic and socio-economic background of the migrant population (i.e. both from within as well as outside the EU), we find that migrants tend to include a concentration of both low as well as highly educated workers. Both sets of migrants uniformly contribute to raising the working-age population of receiving countries. Finally, using data on average incomes and taxes paid and benefits received by migrant and non- migrant households, we find no evidence to support the contention that migrant workers contribute less in taxes than the native-born population, or consume significantly higher benefits. On the contrary, our calculations suggest that migrant workers make a net contribution of approximately 42 billion euros to the national tax and benefit systems of EU13 countries. 20 ANNEX TABLES Table 11: Breakdown of the Population by Country and Age Group 1. 2. 3. 4. Native-born Citizens born Citizens born Non-citizens Non-citizens Population in other outside the from other EU born outside EU countries EU countries EU Austria 16-20 years 6 2 6 3 8 21-55 years 59 35 71 73 79 56+ years 35 63 23 24 14 Total 100 100 100 100 100 Belgium 16-20 years 7 4 5 3 5 21-55 years 58 50 79 67 76 56+ years 35 46 16 30 20 Total 100 100 100 100 100 Spain 16-20 years 5 1 5 1 6 21-55 years 62 82 74 75 87 56+ years 33 17 21 25 8 Total 100 100 100 100 100 France 16-20 years 7 2 2 1 2 21-55 years 58 38 56 54 74 56+ years 35 60 42 46 24 Total 100 100 100 100 100 Greece 16-20 years 5 1 5 2 10 21-55 years 58 95 64 70 80 56+ years 37 4 31 28 9 Total 100 100 100 100 100 Ireland 16-20 years 13 15 7 5 9 21-55 years 58 69 84 79 86 56+ years 29 16 10 17 5 Total 100 100 100 100 100 Italy 16-20 years 5 4 5 0 5 21-55 years 56 71 68 83 90 56+ years 39 24 27 17 5 Total 100 100 100 100 100 Sweden 16-20 years 9 3 10 2 4 21-55 years 54 40 74 63 83 56+ years 36 58 16 35 14 Total 100 100 100 100 100 United Kingdom 16-20 years 7 4 4 6 7 21-55 years 58 24 65 56 83 56+ years 34 71 31 38 11 Total 100 100 100 100 100 21 Table 12: Breakdown of the Population by Country and Highest Educational Attainment 1. 2. 3. 4. Native-born Citizens Citizens Non-citizens Non-citizens Population born in other born outside from other born outside EU the EU EU EU countries countries Austria Primary and below 1 0 4 0 6 Lower secondary 22 22 36 6 46 Upper secondary 52 41 39 43 32 Post secondary 9 11 7 13 5 Tertiary 17 26 15 39 11 Total 100 100 100 100 100 Belgium Primary and below 18 29 28 28 38 Lower secondary 15 13 11 8 8 Upper secondary 31 32 28 31 19 Post secondary 3 3 4 3 1 Tertiary 33 22 29 31 34 Total 100 100 100 100 100 Spain Primary and below 37 18 19 22 28 Lower secondary 20 16 18 10 18 Upper secondary 18 31 27 25 33 Post secondary 1 0 1 4 2 Tertiary 23 36 35 39 19 Total 100 100 100 100 100 France Primary and below 30 55 35 61 55 Lower secondary 7 4 7 5 7 Upper secondary 41 30 32 15 20 Post secondary 1 0 1 1 1 Tertiary 21 12 26 18 18 Total 100 100 100 100 100 Greece Primary and below 41 5 16 6 21 Lower secondary 10 25 10 4 21 Upper secondary 28 46 32 53 37 Post secondary 5 4 9 5 3 Tertiary 16 20 34 32 18 Total 100 100 100 100 100 Ireland Primary and below 27 16 12 8 4 Lower secondary 19 22 8 14 2 Upper secondary 21 25 24 22 18 Post secondary 8 10 5 11 9 Tertiary 24 28 52 46 66 Total 100 100 100 100 100 Italy Primary and below 29 17 17 12 21 Lower secondary 28 38 28 17 32 Upper secondary 27 31 35 46 36 Post secondary 5 7 7 4 3 Tertiary 11 8 13 22 7 Total 100 100 100 100 100 22 Table 12: Breakdown of the Population by Highest Educational Attainment (continued) 1. 2. 3. 4. Native-born Citizens Citizens Non-citizens Non-citizens Population born in other born outside from other born outside EU the EU EU EU countries countries Sweden Primary and below 8 13 15 12 15 Lower secondary 8 8 11 11 14 Upper secondary 47 52 40 23 32 Post secondary 6 5 7 3 6 Tertiary 31 22 27 50 32 Total 100 100 100 100 100 United Kingdom Primary and below 0 0 0 0 0 Lower secondary 33 58 32 41 19 Upper secondary 35 15 23 21 14 Post secondary 3 7 10 11 18 Tertiary 29 20 35 27 49 Total 100 100 100 100 100 EU 4 Primary and below 14 20 28 3 2 Lower secondary 6 19 8 16 15 Upper secondary 62 51 47 59 61 Post secondary 3 1 2 3 1 Tertiary 14 10 15 20 22 Total 100 100 100 100 100 EU 13 Primary and below 24 26 16 32 24 Lower secondary 21 19 21 12 21 Upper secondary 31 33 30 25 26 Post secondary 3 4 5 4 6 Tertiary 21 19 28 27 23 Total 100 100 100 100 100 23 Table 13: Breakdown of Population by Occupational Status EU13 EU4 1. 2. 3. 4. 1. 2. 3. 4. Citizens, Citizens, Non- Non- Citizens, Citizens, Non- Non- Native- born in born citizens citizens, Native- born in born citizens citizens, born the EU outside from born born the EU outside from born the EU other outside the EU other outside EU the EU EU the EU countries countries Armed forces 1 1 0 0 0 1 0 0 0 0 Legislators, senior officials and manage 0 0 0 0 0 0 0 1 0 0 Corporate managers 5 5 6 6 3 3 4 6 3 1 Managers of small enterprises 4 4 3 3 3 2 2 5 9 3 Physical, mathematical and engineer. 3 3 4 4 2 2 4 5 1 1 Life science and health professionals 2 2 3 3 2 2 1 5 1 2 Teaching professionals 4 6 4 4 2 5 3 4 3 0 Other professionals 4 5 4 4 2 5 1 2 7 6 Physical and engineering science 4 4 3 3 1 4 9 6 5 0 Life science and health associate 3 3 2 2 3 2 5 4 2 3 Teaching associate professionals 1 2 1 1 1 1 1 0 0 0 Other associate professionals 8 9 4 4 3 8 15 7 7 5 All white collar workers: 39 44 34 34 22 35 45 45 38 21 Office clerks 11 10 8 8 4 6 5 7 4 3 Customer services clerks 3 4 2 2 1 2 0 3 0 2 Personal and protective services workers 9 9 8 8 13 6 4 10 3 8 Models, salespersons and demonstrators 5 3 3 3 3 7 3 11 5 7 Skilled agricultural and fishery workers 3 1 2 2 2 8 3 1 2 3 Extraction and building trades workers 5 5 13 13 10 6 4 6 6 16 Metal, machinery and related trades work 5 4 3 3 4 7 6 10 10 5 Precision, handicraft, craft printing an 1 1 1 1 1 1 0 1 0 3 Other craft and related trades workers 2 2 2 2 3 5 4 3 6 6 Stationary-plant and related operators 1 1 1 1 2 2 0 2 4 0 Machine operators and assemblers 3 3 2 2 5 3 4 1 13 2 Drivers and mobile plant operators 4 4 4 4 3 5 8 1 1 2 Sales and services elementary occupation 6 6 11 11 19 5 6 1 8 17 Agricultural, fishery and related labor 1 0 1 1 2 0 2 0 0 0 Laborers in mining, construction, manufacturing 3 2 5 5 8 2 4 1 0 4 Total: 100 100 100 100 100 100 100 100 100 100 All persons aged 21 ­ 55 years. 24 Table 14: Average Benefits Collected by Working-Age Individuals Euros per capita per year Unemployment, Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 444 869 226 670 689 777 78 52 421 1. Citizens born in other EU countries 449 1,097 186 495 520 993 N/A 43 567 2. Citizens born outside the EU 1,051 1,405 227 528 351 1,811 92 36 527 3. Non-citizens from other EU countries 656 815 318 273 365 284 137 8 417 4. Non-citizens born outside the EU 845 1,067 94 864 1,164 877 123 17 514 Early retirement Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 108 103 72 100 208 88 210 48 123 1. Citizens born in other EU countries 0 0 0 326 236 49 N/A 42 210 2. Citizens born outside the EU 0 0 78 343 0 98 128 23 156 3. Non-citizens from other EU countries 0 0 936 262 21 10 56 0 210 4. Non-citizens born outside the EU 9 255 5 0 0 0 20 4 19 Child benefits per capita Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 1,081 812 54 617 1,464 937 650 113 536 1. Citizens born in other EU countries 990 907 20 516 1,839 738 N/A 170 683 2. Citizens born outside the EU 1,413 1,206 58 709 1,497 1,233 836 205 786 3. Non-citizens from other EU countries 983 692 41 507 963 624 376 117 559 4. Non-citizens born outside the EU 1,213 702 31 994 1,230 799 626 167 654 Housing allowance per capita Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 27 13 38 275 105 80 248 10 167 1. Citizens born in other EU countries 10 0 0 280 65 87 N/A 20 226 2. Citizens born outside the EU 73 4 25 471 308 294 582 1 406 3. Non-citizens from other EU countries 54 3 102 272 64 41 248 3 159 4. Non-citizens born outside the EU 50 52 21 811 952 497 614 9 477 Social Exclusion per capita Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 49 27 7 N/A 16 52 358 17 194 1. Citizens born in other EU countries 0 7 0 N/A 35 10 N/A 77 155 2. Citizens born outside the EU 71 299 2 N/A 45 460 539 12 528 3. Non-citizens from other EU countries 49 67 13 N/A 28 39 223 32 114 4. Non-citizens born outside the EU 116 442 16 N/A 38 1,182 231 19 191 Disability and other Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 475 568 299 165 758 1,840 545 180 510 1. Citizens born in other EU countries 263 568 210 148 591 2,045 N/A 447 480 2. Citizens born outside the EU 208 772 164 416 486 2,468 518 127 659 3. Non-citizens from other EU countries 150 558 129 73 150 1,144 189 106 305 4. Non-citizens born outside the EU 258 305 38 117 452 1,363 317 26 241 Total Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 2,184 2,393 695 1,826 3,239 3,774 2,089 418 1,900 1. Citizens born in other EU countries 1,712 2,578 415 1,764 3,287 3,922 N/A 799 2,272 2. Citizens born outside the EU 2,817 3,686 555 2,467 2,687 6,363 2,696 404 2,921 3. Non-citizens from other EU countries 1,893 2,134 1,537 1,388 1,590 2,141 1,229 265 1,721 4. Non-citizens born outside the EU 2,490 2,822 205 2,787 3,836 4,719 1,931 243 2,048 All persons aged 21 ­ 55 years. 25 Table 15: Average Benefits Collected by Individuals 16 Years and Older Euros per capita per year Unemployment, Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 351 1,043 180 551 534 544 61 49 384 1. Citizens born in other EU countries 296 1,268 199 357 450 722 N/A 23 481 2. Citizens born outside the EU 1,297 1,314 219 573 294 1,366 65 26 485 3. Non-citizens from other EU countries 790 1,219 237 768 511 399 119 5 678 4. Non-citizens born outside the EU 824 1,877 101 1,017 1,118 732 122 15 586 Retirement Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 4,882 3,150 1,824 4,154 2,242 3,897 3,764 775 3,438 1. Citizens born in other EU countries 11,475 2,195 898 7,429 1,843 5,644 N/A 2,074 5,928 2. Citizens born outside the EU 2,079 529 1,316 4,882 1,055 1,220 2,631 2,251 3,025 3. Non-citizens from other EU countries 3,112 2,551 1,627 3,180 1,055 1,617 3,080 684 2,681 4. Non-citizens born outside the EU 404 1,070 141 1,086 153 1,065 665 181 665 Child benefits per capita Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 780 596 37 418 1,222 574 468 88 382 1. Citizens born in other EU countries 394 547 16 210 1,744 317 N/A 56 366 2. Citizens born outside the EU 1,161 1,148 44 446 1,364 1,012 650 67 593 3. Non-citizens from other EU countries 796 541 30 282 1,001 407 339 96 399 4. Non-citizens born outside the EU 1,161 718 28 839 1,302 679 601 153 614 Housing allowance per capita Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 24 10 27 224 180 130 304 8 177 1. Citizens born in other EU countries 47 9 0 214 140 245 N/A 10 354 2. Citizens born outside the EU 76 4 19 430 286 339 671 5 446 3. Non-citizens from other EU countries 40 12 76 287 101 61 558 2 223 4. Non-citizens born outside the EU 51 40 18 845 879 524 680 9 521 Social Exclusion per capita Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 37 23 6 . 19 34 282 15 159 1. Citizens born in other EU countries 50 83 0 . 36 54 N/A 43 109 2. Citizens born outside the EU 66 353 3 . 38 494 448 9 491 3. Non-citizens from other EU countries 36 46 10 . 33 41 240 22 111 4. Non-citizens born outside the EU 104 464 15 . 52 1,383 248 17 213 Disability and other Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 689 530 328 294 769 1,675 480 194 555 1. Citizens born in other EU countries 323 973 180 259 559 2,737 N/A 307 679 2. Citizens born outside the EU 251 889 148 605 407 2,456 514 142 674 3. Non-citizens from other EU countries 243 678 316 306 284 1,834 348 144 498 4. Non-citizens born outside the EU 406 262 46 265 388 1,525 277 56 280 Total Austria Belgium Spain France Ireland Sweden UK EU 4 EU 13 Native-born population 6,764 5,351 2,402 5,640 4,966 6,854 5,360 1,129 5,052 1. Citizens born in other EU countries 12,584 5,075 1,293 8,469 4,772 9,719 N/A 2,514 7,876 2. Citizens born outside the EU 4,930 4,236 1,748 6,935 3,445 6,888 4,980 2,501 5,563 3. Non-citizens from other EU countries 5,018 5,047 2,295 4,823 2,985 4,358 4,684 953 4,544 4. Non-citizens born outside the EU 2,951 4,431 350 4,053 3,892 5,908 2,593 430 2,820 26