Immigration vs. Poverty: Causal Impact on Demand for Redistribution in a Survey Experiment

Abstract

In a survey experiment conducted in Germany, we investigate how preferences over both the financing and the supply of redistributive policies are affected by poverty and immigration. We find that while information about poverty has no detectable impact on the progressivity of the respondents' desired income tax schedule, information about immigration has a sizeable and significant negative impact for middle income respondents. The opposite can be observed for low income earners, such that effects cancel out at the aggregate level. On the supply side, middle income respondents seem to envisage public education as a viable response to the challenges of both poverty and immigration, while low income respondents want to spend less on education due to immigration. These strong heterogeneous effects with respect to respondents' income levels suggest that understanding the relationship between immigration and demand for redistribution and addressing its pitfalls requires in-depth investigations by population segment.

Keywords: immigration, poverty, redistribution, survey experiment

JEL Classification: D31, D63, H53, J15