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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.

Suggested Citation

  • Jordi Jofre-Monseny (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB)) & Pilar Sorribas-Navarro (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB)) & Javier Vazquez-Gren, 2011. "Welfare spending and ethnic heterogeneity: Evidence from a massive immigration wave," Working Papers in Economics 269, Universitat de Barcelona. Espai de Recerca en Economia.
    • Handle: RePEc:bar:bedcje:2011269
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    Cited by:

    1. 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.
    2. 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.

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    More about this item

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • 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
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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