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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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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
Date of revision:
Handle: RePEc:edn:esedps:195
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  1. 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.
  2. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
  3. Assaf Razin & Effraim Sadka & Phillip Swagel, 1998. "Tax Burden and Migration: A Political Economy Theory and Evidence," NBER Working Papers 6734, National Bureau of Economic Research, Inc.
  4. Ortega, Francesc, 2009. "Immigration, Citizenship, and the Size of Government," IZA Discussion Papers 4528, Institute for the Study of Labor (IZA).
  5. Alberto Alesina & Reza Baqir & William Easterly, 1997. "Public Goods and Ethnic Divisions," NBER Working Papers 6009, National Bureau of Economic Research, Inc.
  6. Woojin Lee & John Roemer & Karine van der Straeten, 2005. "Racism, xenophobia, and redistribution," UMASS Amherst Economics Working Papers 2005-15, University of Massachusetts Amherst, Department of Economics.
  7. Mark Gradstein & Maurice Schiff, 2006. "The political economy of social exclusion, with implications for immigration policy," Journal of Population Economics, Springer, vol. 19(2), pages 327-344, June.
  8. repec:tpr:qjecon:v:115:y:2000:i:2:p:499-531 is not listed on IDEAS
  9. repec:tpr:qjecon:v:118:y:2003:i:4:p:1335-1374 is not listed on IDEAS
  10. Daron Acemoglu & James Robinson, 1999. "A Theory of Political Transitions," Working papers 99-26, Massachusetts Institute of Technology (MIT), Department of Economics.
  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. Matthew Ellman & Leonard Wantchekon, 1999. "Electoral competition under the threat of political unrest," Economics Working Papers 457, Department of Economics and Business, Universitat Pompeu Fabra.
  13. Joan Esteban & Debraj Ray, 2008. "On the Salience of Ethnic Conflict," American Economic Review, American Economic Association, vol. 98(5), pages 2185-2202, December.
  14. 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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