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Immigrant Voters, Taxation and the Size of the Welfare State

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  • Arnaud Chevalier
  • Benjamin Elsner
  • Andreas Lichter
  • Nico Pestel

Abstract

This paper studies the impact of immigration on public policy setting. We exploit the sudden arrival of eight million forced migrants in West Germany after WWII. These migrants were poorer than the local population but had full voting rights and were eligible for social welfare. We show that cities responded to this shock with selective tax raises and shifts in spending. Voting data suggests that these changes were partly driven by the immigrants’ political influence. We further document a strong persistence of the effect. The initial migration shock changed the preferences for redistribution of the following generations.

Suggested Citation

  • Arnaud Chevalier & Benjamin Elsner & Andreas Lichter & Nico Pestel, 2018. "Immigrant Voters, Taxation and the Size of the Welfare State," SOEPpapers on Multidisciplinary Panel Data Research 994, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp994
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    Cited by:

    1. Simone Moriconi & Giovanni Peri & Riccardo Turati, 2022. "Are Immigrants more Left leaning than Natives?," NBER Working Papers 30523, National Bureau of Economic Research, Inc.
    2. Rozo, Sandra V. & Vargas, Juan F., 2021. "Brothers or invaders? How crisis-driven migrants shape voting behavior," Journal of Development Economics, Elsevier, vol. 150(C).
    3. Alberto Alesina & Stefanie Stantcheva, 2020. "Diversity, Immigration, and Redistribution," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 329-334, May.
    4. Albarosa, Emanuele & Elsner, Benjamin, 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," IZA Discussion Papers 15850, Institute of Labor Economics (IZA).
    5. Rostislav Staněk & Ondřej Krčál & Štěpán Mikula, 2021. "Social Capital and Mobility: An Experimental Study," MUNI ECON Working Papers 2021-12, Masaryk University, revised Feb 2023.
    6. Moriconi, Simone & Peri, Giovanni & Turati, Riccardo, 2023. "Are Immigrants More Left Wing than Natives?," IZA Discussion Papers 16164, Institute of Labor Economics (IZA).
    7. Giuranno Michele G. & Biswas Rongili, 2019. "Internal Migration and Public Policy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(4), pages 1-16, October.
    8. Lustenhouwer, Joep & Makarewicz, Tomasz & Peña, Juan Carlos & Proaño Acosta, Christian, 2021. "Are some people more equal than others? Experimental evidence on group identity and income inequality," BERG Working Paper Series 168, Bamberg University, Bamberg Economic Research Group.
    9. Becker, Sascha O. & Ferrara, Andreas, 2019. "Consequences of forced migration: A survey of recent findings," Labour Economics, Elsevier, vol. 59(C), pages 1-16.
    10. Alberto Alesina & Armando Miano & Stefanie Stantcheva, 2020. "The Polarization of Reality," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 324-328, May.
    11. Nover, Justus, 2023. "Local labor markets as a taxable location factor? Evidence from a shock to foreign labor supply," ZEW Discussion Papers 23-012, ZEW - Leibniz Centre for European Economic Research.
    12. Braun, Sebastian T. & Dwenger, Nadja, 2020. "Settlement location shapes the integration of forced migrants: Evidence from post-war Germany⁎," Explorations in Economic History, Elsevier, vol. 77(C).
    13. Emanuele Albarosa & Benjamin Elsner, 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1183, DIW Berlin, The German Socio-Economic Panel (SOEP).
    14. Albarosa, E. & Elsner, B., 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," World Development, Elsevier, vol. 167(C).
    15. Braun, Sebastian Till & Weber, Henning, 2021. "How do regional labor markets adjust to immigration? A dynamic analysis for post-war Germany," Journal of International Economics, Elsevier, vol. 129(C).
    16. 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.
    17. Salvador Traettino, 2022. "Migración forzada y finanzas públicas locales: Evidencia de los municipios en Colombia," Documentos CEDE 20335, Universidad de los Andes, Facultad de Economía, CEDE.
    18. Moriconi, Simone & Peri, Giovanni & Turati, Riccardo, 2019. "Immigration and voting for redistribution: Evidence from European elections," Labour Economics, Elsevier, vol. 61(C).

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    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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