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28th Jul 2016

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Denmark profits from Eastern European worker contributions

  • Workers from eastern Europe made up 1.5 percent of full-time employment in 2012 in Denmark. (Photo: Michael Tapp)

Eastern European workers in Denmark pay more into the state coffers than they get out, according to a new study by the Confederation of Danish Employers.

The study showed that they each paid on average €2,142 more than they received from the state in 2012/2013.

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While the foreign workers appear to provide good business for the Danish treasury, the Danes themselves represented a loss for the state.

On average, they received €800 more from the public purse than they contributed.

The figures, published on Wednesday (9 April), overturn a general perception that eastern European workers place a burden on Danish public coffers.

The calculations provide a snapshot of the EU workers' contribution to government revenues, for example via income tax and VAT. They also include any pay-outs from public funds, such as income transfers, child benefits and hospital expenses.

On the revenue side, Danes paid on average €4,286 more per year in income taxes than eastern Europeans. But the Danes were also on average better paid than their eastern colleagues.

Overall, the calculations show an average yearly income of €23,975 for Danes while eastern Europeans working in the country receive €18,886.

Early retirement, old age pensions, civil service pensions and housing benefits make Danish workers more costly to the public purse than eastern European workers.

Pensions cost the state €4,553 per Danish worker, but only €174 per foreign worker on average in 2012/2013.

Figures from the study lend weight to recent public criticism that the child benefit scheme is too generous to workers from abroad.

While Danish workers received €388 on average from the scheme in 2012/2013, eastern European workers took home €469 on average for their children.

However, the eastern Europeans are mainly represented in the 18 to 40-year-old age group, when most people have their children, while the Danish working population is more spread across the age groups.

The study shows that the foreign workers also cost more in unemployment benefits and social assistance than Danes.

An eastern European worker cost the Danish state an average of €777 in unemployment benefits in 2012/2013. The equivalent for a Danish worker was €496.

The study covered workers from 10 EU countries; Poland, Hungary, Estonia, Lithuania, Slovenia, Czech Republic, Slovakia, Bulgaria, Latvia and Romania. They made up 1.5 percent of full-time employment in 2012 in Denmark.

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