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Immigration and local spending in social services: evidence from a massive immigration wave

Author

Listed:
  • Jordi Jofre-Monseny

    (Universitat de Barcelona)

  • Pilar Sorribas-Navarro

    (Universitat de Barcelona)

  • Javier Vázquez-Grenno

    (Universitat de Barcelona)

Abstract

The aim of this paper is to analyze the relationship between immigration and redistributive public spending by using the recent, massive arrival of immigrants in Spain. Specifically, we focus our analysis on the effect of 1998–2006 changes in local immigrant density on contemporaneous changes in municipal spending in social services. To address the potential endogenous location of immigrants, we adopt an instrumental variables approach that uses the distribution of rental housing in 1991 to predict the location of immigrant inflows. The results indicate that (per capita) social spending increased less in those municipalities that recorded the largest increases in immigrant density. We interpret our results as a reduction in natives’ demand for redistributive public spending.

Suggested Citation

  • Jordi Jofre-Monseny & Pilar Sorribas-Navarro & Javier Vázquez-Grenno, 2016. "Immigration and local spending in social services: evidence from a massive immigration wave," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1004-1029, December.
    • Handle: RePEc:kap:itaxpf:v:23:y:2016:i:6:d:10.1007_s10797-016-9399-y
    DOI: 10.1007/s10797-016-9399-y
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    3. Matti Viren, 2022. "The fiscal consequences of immigration: a study of local governments’ expenditures," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(1), pages 75-94, April.
    4. Dowon Kim & Dongwon Lee, 2021. "Immigration and the pattern of public spending: evidence from OECD countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 1014-1034, August.
    5. Benjamin Elsner & Jeff Concannon, 2020. "Immigration and Redistribution," Working Papers 202024, School of Economics, University College Dublin.
    6. M. Christian Lehmann, 2019. "How many refugees should the US admit?," Economics Bulletin, AccessEcon, vol. 39(3), pages 2117-2121.
    7. Golin, Marta & Romarri, Alessio, 2022. "Broadband Internet and Attitudes Towards Migrants: Evidence from Spain," IZA Discussion Papers 15804, Institute of Labor Economics (IZA).
    8. Anna Maria Mayda & Mine Z. Senses & Walter Steingress, 2023. "Immigration and Provision of Public Goods: Evidence at the Local Level in the U.S," Staff Working Papers 23-57, Bank of Canada.
    9. Ferraresi, Massimiliano, 2023. "JUE Insight: Immigrants, social transfers for education, and spatial interactions," Journal of Urban Economics, Elsevier, vol. 136(C).
    10. Freier, Ronny & Geys, Benny & Holm, Joshua, 2016. "Religious heterogeneity and fiscal policy: Evidence from German reunification," Journal of Urban Economics, Elsevier, vol. 94(C), pages 1-12.
    11. Konstantinos Matakos & Riikka Savolainen & Janne Tukiainen, 2020. "Refugee Migration and the Politics of Redistribution: Do Supply and Demand Meet?," Discussion Papers 132, Aboa Centre for Economics.
    12. Mäkelä Erik & Viren Matti, 2018. "Migration Effects on Municipalities’ Expenditures," Review of Economics, De Gruyter, vol. 69(1), pages 1-28, April.
    13. Amaia Palencia-Esteban, 2022. "Immigration, childcare and gender differences in the Spanish labor market," Working Papers 610, ECINEQ, Society for the Study of Economic Inequality.
    14. Murard, Elie, 2017. "Less Welfare or Fewer Foreigners? Immigrant Inflows and Public Opinion towards Redistribution and Migration Policy," IZA Discussion Papers 10805, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Social services; Public sector spending; Immigration; Redistribution;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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