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The Threat of "Welfare Tourism" Is Exaggerated - No Negative Effects on Swedish Economy

Europe is in the middle of a lively debate on so-called welfare tourism, as exemplified by British Prime Minister David Cameron’s recent remarks on labour immigration from the new EU member states. In Sweden, however, the free labour immigration from Eastern Europe does not seem to have affected the public finances negatively. This is the conclusion of new research by Joakim Ruist, economics researcher at the University of Gothenburg, Sweden, specialising in international migration.

Joakim Ruist’s doctoral thesis, titled Immigration, Work, and Welfare, explores how a country’s labour market, public finances and attitudes to immigration are affected by immigration, with a focus on Europe.

When the EU gained ten new member states in 2004, Sweden was the only country that did not restrict the new EU citizens from accessing its labour market and national welfare systems. In contrast, the U.K. and Ireland introduced minor restrictions and the other members established substantial restrictions to be in effect during the allowable seven-year transition period.

"Sweden was unique with its lack of restrictions. When I looked at how labour immigration from the new EU countries has affected the Swedish public finances, I really didn’t find any effects. This is a strong argument against fears of so-called welfare tourism," says Joakim Ruist.

Besides providing an argument against the proposed threats of welfare tourism, Ruist believes that his research may shed light on the possible consequences of situations such as the EU expansion.

"What’s interesting about looking at Sweden is that it is a wealthy country that chose to accept unrestricted labour immigration from poorer countries and that we find that its public finances haven’t suffered at all. In fact, the only effect I found was weakly positive."

Comparing data from 16 European countries from 2002 to 2010, Ruist’s research also shows that people’s attitudes to immigration have been affected by the economic downturn.

"I found that a weaker economic climate in a country implies more negative attitudes to immigration among its citizens. Until now, this has been difficult to show empirically. It is also clear that negative attitudes to immigration increase the most in countries with high rates of immigration," says Ruist.

For more information please contact:
Joakim Ruist, researcher
The Department of Economics
joakim.ruist@economics.gu.se
+46 (0)31 786 29 15