The foreign-born population in the European Union and its contribution to national tax and benefit systems : some insights from recent household survey data

Despite the purported surge in internal migration following the 2004 enlargement of the European Union, data from the 2006 European Union Survey of Income and Living Conditions show that internal migrants are a relatively small share of the European Union's population. Depending on the exact definition used, only about 1 to 2 percent of the population of European Union-13 countries (members prior to the 2004 enlargement, not including Germany and Luxembourg) were born in other European Union countries, while the corresponding share for European Union-4 countries (Poland, Hungary, Czech Republic, and Slovakia) is even lower. By contrast, about 6 percent of the population of European Union-13 countries was born outside the European Union. On examining the demographic and socio-economic background of the migrant population (both from within as well as outside the European Union), this paper finds 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. Using data on average incomes and taxes paid and benefits received by migrant and non-migrant households, the authors find 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 migrant workers make a net contribution of approximately 42 billion euros to the national tax and benefit systems of European Union-13 countries.