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Ethnic Diversity and Preferences for Redistribution

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  • Matz Dahlberg
  • Karin Edmark
  • Heléne Lundqvist

Abstract

This paper investigates the causal link between the ethnic diversity in a society and its inhabitants' preferences for redistribution. We exploit exogenous variation in immigrant shares stemming from a nationwide program placing refugees in municipalities throughout Sweden during 1985-94 and match data on refugee placement to panel survey data on inhabitants of the receiving municipalities. We find significant, negative effects of increased immigration on the support for redistribution. The effect is especially pronounced among high-income earners. We also establish that estimates from earlier studies failing to identify causal effects are likely to be positively biased (i.e., less negative).

Suggested Citation

  • Matz Dahlberg & Karin Edmark & Heléne Lundqvist, 2012. "Ethnic Diversity and Preferences for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 41-76.
  • Handle: RePEc:ucp:jpolec:doi:10.1086/665800
    DOI: 10.1086/665800
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    References listed on IDEAS

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    1. Claudia Senik & Holger Stichnoth & Karine Straeten, 2009. "Immigration and Natives’ Attitudes towards the Welfare State: Evidence from the European Social Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 91(3), pages 345-370, May.
    2. Per-Anders Edin & Peter Fredriksson & Olof Åslund, 2003. "Ethnic Enclaves and the Economic Success of Immigrants—Evidence from a Natural Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 329-357.
    3. John E. Roemer & Lee Woojin & Karine van der Straeten, 2007. "Racism, Xenophobia, and Distribution: Multi-issue Politics in Advanced Democracies," Post-Print halshs-00754747, HAL.
    4. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    5. Woojin Lee & John Roemer & Karine Van der Straeten, 2006. "Racism, Xenophobia, and Redistribution," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 446-454, 04-05.
    6. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June.
    7. Andreoni, James & Payne, A. Abigail & Smith, Justin & Karp, David, 2016. "Diversity and donations: The effect of religious and ethnic diversity on charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 128(C), pages 47-58.
    8. repec:pse:psecon:2008-43 is not listed on IDEAS
    9. Christer Gerdes, 2011. "The Impact of Immigration on the Size of Government: Empirical Evidence from Danish Municipalities," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 74-92, March.
    10. Jacob L. Vigdor, 2004. "Community Composition and Collective Action: Analyzing Initial Mail Response to the 2000 Census," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 303-312, February.
    11. Dahlberg, Matz & Edmark, Karin, 2008. "Is there a "race-to-the-bottom" in the setting of welfare benefit levels? Evidence from a policy intervention," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1193-1209, June.
    12. Shayo, Moses, 2009. "A Model of Social Identity with an Application to Political Economy: Nation, Class, and Redistribution," American Political Science Review, Cambridge University Press, vol. 103(2), pages 147-174, May.
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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