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 con?ict intensi?es as the migrant population becomes bigger. This effect is more acute in more equal societies. Despite the threat of con?ict, the welfare of the native population unambiguously increases with the stock of migrants.
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|Date of creation:||01 Jun 2010|
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