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Welfare spending and ethnic heterogeneity: Evidence from a massive immigration wave

  • 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)

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.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 269.

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Length: 0 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:bar:bedcje:2011269
Contact details of provider: Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
Web page: http://www.ere.ub.es

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  1. 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.
  2. Giovanni Peri, 2012. "The Effect Of Immigration On Productivity: Evidence From U.S. States," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 348-358, February.
  3. Fiva, Jon H., 2009. "Does welfare policy affect residential choices? An empirical investigation accounting for policy endogeneity," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 529-540, April.
  4. Matz Dahlberg & Karin Edmark & Heléne Lundqvist, 2011. "Ethnic Diversity and Preferences for Redistribution," CESifo Working Paper Series 3325, CESifo Group Munich.
  5. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  6. Lind, Jo Thori, 2007. "Fractionalization and the size of government," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 51-76, February.
  7. Libertad González Luna & Francesc Ortega, 2007. "How do very open economies adjust to large immigration flows? Recent evidence from Spanish regions," Economics Working Papers 1059, Department of Economics and Business, Universitat Pompeu Fabra.
  8. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
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