Do social protection expenditures predict female immigrant entrepreneurship? Evidence from the European Union

Purpose In debates on immigrant integration, we move beyond the “welfare magnet hypothesis” by examining whether the host country's social welfare system, as part of its institutional environment, influences female immigrant entrepreneurship (FIE) through mechanisms of risk buffering, care constraints and opportunity costs. Design/methodology/approach We adopt a macro-level perspective of European Union countries, and we estimate panel regressions based on the panel data for the years 2006–2021. Findings Our results show that the expenditure on all functions of social benefits, and the expenditure on the function of old-age function had a positive effect on female migrant entrepreneurship, while the expenditure on the family and children's function had an inhibitory effect on female migrant entrepreneurship. Social welfare plays an institutional role in creating a safer environment for immigrant women to undertake their entrepreneurial journey, possibly by reducing the entrepreneurial risk. In contrast, generous expenditure on family and children's functions might discourage entrepreneurship by reinforcing traditional gender roles or making alternative income sources (like family allowances) more attractive. This could lead some women to prioritize caregiving over entrepreneurial activity. Originality/value Unlike previous research on overall social spending or general entrepreneurship, our analysis distinguishes the relationship between specific welfare components (e.g. old-age, family and children's benefits) and FIE. These results provide new evidence for countries facing employment and inclusion challenges. Social spending demonstrates its nature as a social investment that provides a safety net and also fosters long-term value creation in society by enabling the economic participation of immigrant women.