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Immigration, Conflict and Redistribution

We study how the possibility of a conflict between natives and immigrants shapes income redistribution in democracies. Conflict erupts when immigrants are given less than what they could obtain by resorting to confrontation. That in turn can make natives vote for lower tax rates and lower public spending. We show that income redistribution, both vertical (from the rich to the poor) and horizontal (from natives to migrants), decreases with the level of immigration. This is because the threat of conflict intensifies as the migrant population becomes bigger. Inequality softens the effect of immigration on tax rates but reduces horizontal redistribution. Despite the threat of conflict, the welfare of the native population unambiguously increases with the stock of migrants.

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File URL: http://www.econ.ed.ac.uk/papers/id195_esedps.pdf
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Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 195.

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Length: 27
Date of creation: Jun 2010
Handle: RePEc:edn:esedps:195
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  1. Ortega Francesc, 2010. "Immigration, Citizenship, and the Size of Government," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-40, March.
  2. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
  3. 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.
  4. 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.
  5. Anna Maria Mayda, 2006. "Who Is Against Immigration? A Cross-Country Investigation of Individual Attitudes toward Immigrants," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 510-530, August.
  6. Mark Gradstein & Maurice Schiff, 2006. "The political economy of social exclusion, with implications for immigration policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 327-344, June.
  7. Matthew Ellman & Leonard Wantchekon, 2000. "Electoral Competition Under the Threat of Political Unrest," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 499-531.
  8. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 2002. "Tax burden and migration: a political economy theory and evidence," Journal of Public Economics, Elsevier, vol. 85(2), pages 167-190, August.
  9. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, vol. 91(4), pages 938-963, September.
  10. Joan Esteban & Debraj Ray, 2008. "On the Salience of Ethnic Conflict," American Economic Review, American Economic Association, vol. 98(5), pages 2185-2202, December.
  11. Alberto Alesina & Edward Glaeser & Bruce Sacerdote, 2001. "Why Doesn't The US Have a European-Style Welfare State?," Harvard Institute of Economic Research Working Papers 1933, Harvard - Institute of Economic Research.
  12. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
  13. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
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