Immigration and Income Redistribution – A Political Economy Analysis
Public Choice, 131/1-2, 101-116, 2007
Posted: 27 Sep 2019
Date Written: 2007
This paper examines the effect of immigration on the extent of income redistribution via majority voting on the income tax. The tax outcome depends on the size of the native majority and the initial amount of redistribution in the economy, which in turn determines the skill composition of immigrants. As a main result, we derive conditions for multiple tax equilibria: if the native majority of either skilled or unskilled is not too strong and immigrants are allowed to vote, both a high-tax and a low-tax outcome is possible. In a referendum, natives will then vote against immigrant voting. At best, natives are indifferent towards immigrant voting.
Keywords: political economy, immigration, income redistribution
JEL Classification: F22, H73, D72
Suggested Citation: Suggested Citation