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Welfare spending and ethnic heterogeneity: Evidence from a massive immigration wave

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  • Jordi Jofre-Monseny (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB))
  • Pilar Sorribas-Navarro (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB))
  • Javier Vazquez-Grenno (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB))

    (Universitat de Barcelona)

Abstract

The aim of this paper is to examine the relationship between ethnic heterogeneity and redistribution, by using the recent and massive arrival of immigrants in Spain. Specifically, we focus on the effect of changes in immigrant density, recorded between 1998 and 2006, on contemporaneous changes in municipal welfare spending. We instrument for immigrant density using established settlement patterns per country of origin so as to assign predicted flows of immigrants to municipalities. We find that welfare spending increased less in those municipalities that recorded the largest increases in immigrant density. We also provide evidence of a positive relationship between immigrant density and the vote share accruing to right-wing parties. Hence, our results are consistent with theories that predict a negative relationship between ethnic heterogeneity and redistribution.

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Bibliographic Info

Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 269.

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Length: 0 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:bar:bedcje:2011269

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
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  1. Dahlberg, Matz & Edmark, Karin & Lundqvist, Heléne, 2011. "Ethnic Diversity and Preferences for Redistribution," Working Paper Series, Center for Fiscal Studies 2011:1, Uppsala University, Department of Economics.
  2. Libertad González Luna & Francesc Ortega, 2007. "How do very open economies adjust to large immigration flows? Recent evidence from Spanish regions," Economics Working Papers 1059, Department of Economics and Business, Universitat Pompeu Fabra.
  3. Woojin Lee & John Roemer & Karine van der Straeten, 2005. "Racism, xenophobia, and redistribution," UMASS Amherst Economics Working Papers 2005-15, University of Massachusetts Amherst, Department of Economics.
  4. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  5. Jo Thori Lind, 2003. "Fractionalization and the Size of Government," CESifo Working Paper Series 1000, CESifo Group Munich.
  6. Fiva, Jon H., 2009. "Does welfare policy affect residential choices? An empirical investigation accounting for policy endogeneity," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 529-540, April.
  7. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  8. Giovanni Peri, 2009. "The Effect of Immigration on Productivity: Evidence from US States," NBER Working Papers 15507, National Bureau of Economic Research, Inc.
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Cited by:
  1. Alessandro Innocenti & Francesca Lorini & Chiara Rapallini, 2014. "Ethnic Heterogeneity, Voting Partecipation and Local Economic Growth. The Case of Belgium," Working Papers - Economics wp2014_03.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  2. Ronny Freier & Benny Geys & Joshua Holm, 2013. "Religious Heterogeneity and Fiscal Policy: Evidence from German Reunification," Discussion Papers of DIW Berlin 1266, DIW Berlin, German Institute for Economic Research.

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