Ethnic Diversity and Preferences for Redistribution
AbstractIn recent decades, the immigration of workers and refugees to Europe has increased substantially, and the composition of the population in many countries has consequently become much more heterogeneous in terms of ethnic background. If people exhibit in-group bias in the sense of being more altruistic to one's own kind, such increased heterogeneity will lead to reduced support for redistribution among natives. This paper exploits a nationwide program placing refugees in municipalities throughout Sweden during the period 1985-94 to isolate exogenous variation in immigrant shares. We match data on refugee placement to panel survey data on inhabitants of the receiving municipalities to estimate the causal e ects of increased immigrant shares on preferences for redistribution. The results show that a larger immigrant population leads to less support for redistribution in the form of preferred social benefit levels. This reduction in support is especially pronounced for respondents with high income and wealth. We also establish that OLS estimators that do not properly deal with endogeneity problems - as in earlier studies - are likely to yield positively biased (i.e., less negative) effects of ethnic heterogeneity on preferences for redistribution.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Labor Studies with number 2011:1.
Length: 43 pages
Date of creation: 03 Jan 2011
Date of revision:
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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
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Income redistribution; ethnic heterogeneity; immigration;
Other versions of this item:
- Matz Dahlberg & Karin Edmark & Hel�ne Lundqvist, 2012. "Ethnic Diversity and Preferences for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 41 - 76.
- 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.
- Matz Dahlberg & Karin Edmark & Heléne Lundqvist, 2011. "Ethnic Diversity and Preferences for Redistribution," Working Papers 2011/2, Institut d'Economia de Barcelona (IEB).
- Matz Dahlberg & Karin Edmark & Heléne Lundqvist, 2011. "Ethnic Diversity and Preferences for Redistribution," CESifo Working Paper Series 3325, CESifo Group Munich.
- Dahlberg, Matz & Edmark, Karin & Lundqvist, Heléne, 2011. "Ethnic Diversity and Preferences for Redistribution," Working Paper Series 860, Research Institute of Industrial Economics.
- Dahlberg, Matz & Edmark, Karin & Lundqvist, Heléne, 2011. "Ethnic Diversity and Preferences for Redistribution," Working Paper Series 2011:1, Uppsala University, Department of Economics.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
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