Immigration and Preferences for Redistribution in Europe

Abstract

We examine the relationship between immigration and preferences for redistribution in Europe using a newly assembled data set of immigrant stocks for 140 regions in 16 Western European countries. Exploiting within-country variations in the share of immigrants at the regional level, we find that native respondents display lower support for redistribution when the share of immigrants in their residence region is higher. This negative association is driven by regions of countries with relatively large Welfare States and by respondents at the center or at the right of the political spectrum. The effects are also stronger when immigrants originate from Middle-Eastern or Eastern European countries, are less skilled than natives, and experience more residential segregation. These results are unlikely to be driven by immigrants' endogenous location choices, that is, by welfare magnet effects or by immigrants' sorting into regions with better economic opportunities. They are also robust to instrumenting immigration with a standard shift-share approach or to controlling for regional growth prospects.

Keywords: Immigration, Income Redistribution, population heterogeneity, welfare systems

JEL Classification: D31, D64, I3, Z13