Immigration and Redistribution

50 Pages Posted: 15 Sep 2020

See all articles by Benjamin Elsner

Benjamin Elsner

IZA Institute of Labor Economics

Jeff Concannon

University College Dublin (UCD)

Abstract

One of the fundamental questions in the social sciences is whether modern welfare states can be sustained as countries welcome more immigrants. On theoretical grounds, the relationship between immigration and support for redistribution is ambiguous. Immigration may increase ethnic diversity, which may reduce the support for redistribution. On the other hand, natives may demand more redistribution as an insurance against labour market risks brought by immigration. In this chapter, we review the theoretical and empirical literature on immigration and redistribution from across the social sciences. We focus on two themes, namely the effect of immigration on natives' support for redistribution, and the effect on the actual setting of tax and spending policies. Recent empirical evidence suggests that immigration lowers the support for redistribution and leads to lower taxation and spending. However, the magnitude of these effects appears to be highly context-dependent.

Keywords: migration, redistribution, public policy

JEL Classification: F22, H2, H4

Suggested Citation

Elsner, Benjamin and Concannon, Jeff, Immigration and Redistribution. IZA Discussion Paper No. 13676, Available at SSRN: https://ssrn.com/abstract=3691389 or http://dx.doi.org/10.2139/ssrn.3691389

Benjamin Elsner (Contact Author)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.benjaminelsner.com

Jeff Concannon

University College Dublin (UCD)

Belfield
Dublin
Ireland

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