Working Paper

Is unrestricted immigration compatible with inclusive welfare states? The (un)sustainability of EU exceptionalism

Published 24 June 2015 / By Martin Ruhs

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The economist Milton Friedman was one of the first to argue that there is a fundamental tension between what he called "free immigration to jobs" and "free immigration to welfare" (Friedman 1978). The political scientist Gary Freeman made a similar point in his widely cited article on ‘Migration and the political economy of the welfare state’, which concluded that “ultimately, national welfare states cannot coexist with the free movement of labor” (Freeman 1986, p.51). The implication of these arguments is that you can have large-scale labour immigration or an inclusive welfare state - but not both. However, under the 'free movement' rules of the European Union, EU workers have both the right to freely migrate and work in any EU member state and the right to full and equal access to that country’s welfare state. Does the experience of the EU show that the alleged tension between large-scale labour immigration and inclusive welfare states does not exist or, if it exists, that it can be overcome? Or will the free movement of workers within the EU prove to be unsustainable? In this paper I argue and show why continuing to insist on both unrestricted migration and equal access to national welfare states for EU workers has the potential to undermine the political sustainability of ‘free movement’ because it does not take adequate account of important differences in the labour markets and welfare states across EU member states.


Martin Ruhs is Associate Professor of Political Economy at the Oxford University Department for Continuing Education, a Fellow of Kellogg College and COMPAS Affiliate 2015-16. E-mail:


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