27 Pages Posted: 24 Sep 2014
Date Written: January 15, 2014
In a standard median voter model, low-income immigration increases the size of the welfare state. Other research suggests evidence for a group-interested voter model, which predicts that welfare will shrink with an increase in low-income immigration. We contend that neither model accurately describes political reality after testing these theories with United States data from 1970 to 2010. We use a variety of measures for welfare and related public spending such as K-12 education, Medicaid, and unemployment insurance. Contrary to expectations from previous work focused on Europe, we find that the amount of immigrant-driven ethnic and racial diversity does not have a significant effect on these spending areas, whether considered in total expenditure or per capita. This could be due to countervailing pressures from these two models of voter motivation or due to factors unrelated to immigration, such as differences in institutions.
Keywords: Behavioral Economics, Immigration, Redistribution, Political Economy, Public Economics
JEL Classification: I3, H3, J1
Suggested Citation: Suggested Citation
Gochenour, Zachary and Nowrasteh, Alex, The Political Externalities of Immigration: Evidence from the United States (January 15, 2014). Cato Institute Working Paper, January 2014. Available at SSRN: https://ssrn.com/abstract=2500485 or http://dx.doi.org/10.2139/ssrn.2500485