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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. M. Christian Lehmann, 2019. "How many refugees should the US admit?," Economics Bulletin, AccessEcon, vol. 39(3), pages 2117-2121.
    4. Mäkelä Erik & Viren Matti, 2018. "Migration Effects on Municipalities’ Expenditures," Review of Economics, De Gruyter, vol. 69(1), pages 1-28, April.
    5. 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.
    6. 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).
    7. Jeong, Wonhee & Yu, Unjong, 2019. "Prisoner’s dilemma game on complex networks with a death process: Effects of minimum requirements and immigration," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 517(C), pages 47-52.
    8. 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.

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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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