To estimate the causal effect of refugee migration on voting outcomes in parliamentary and municipal elections in Denmark, our study is the first that addresses the key problem of immigrant sorting by exploiting a policy that assigned refugee immigrants to municipalities on a quasi-random basis. We find that in all but the most urban municipalities, allocation of larger refugee shares between electoral cycles leads to an increase in the vote share for right-leaning parties with an anti-immigration agenda, and we show large differences in voters’ responses to refugee allocation according to pre-policy municipal characteristics. However, in the largest and urban municipalities, refugee allocation has—if anything—the opposite effect on vote shares for anti-immigration parties. This coincides with a sharp divide in attitudes to refugees between urban and rural populations, which may be partly explained by distinctive interactions between natives and those with different background in cities and rural areas. Refugee allocation also has a large impact on the anti-immigration parties’ choice of where to stand for municipal election, and we provide some evidence that it influences voter turnout.

/pdf/refugee-migration-and-electoral-outcomes-31oevx8cw3.pdf

Refugee Migration and Electoral Outcomes

We classify the empirical literature on the wage impact of immigration into three groups, where studies in the first two groups estimate different relative effects, and studies in the third group estimate the total effect of immigration on wages We interpret the estimates obtained from the different approaches through the lens of the canonical model to demonstrate that they are not comparable We then relax two key assumptions in this literature, allowing for inelastic and heterogeneous labor supply elasticities of natives and the "downgrading" of immigrants "Downgrading" occurs when the position of immigrants in the labor market is systematically lower than the position of natives with the same observed education and experience levels Downgrading means that immigrants receive lower returns to the same measured skills than natives when these skills are acquired in their country of origin We show that heterogeneous labor supply elasticities, if ignored, may complicate the interpretation of wage estimates, and particularly the interpretation of relative wage effects Moreover, downgrading may lead to biased estimates in those approaches that estimate relative effects of immigration, but not in approaches that estimate total effects We conclude that empirical models that estimate total effects not only answer important policy questions, but are also more robust to alternative assumptions than models that estimate relative effects

https://www.aeaweb.org/articles/pdf/doi/10.1257/jep.30.4.31

The impact of immigration: Why do studies reach such different results?

What Money Can't Buy: The Moral Limits of Markets

In this article, I jointly investigate the political and the economic effects of immigration, and study the causes of anti-immigrant sentiments. I exploit exogenous variation in European immigration to U.S. cities between 1910 and 1930 induced by World War I and the Immigration Acts of the 1920s, and instrument immigrants’ location decision relying on pre-existing settlement patterns. I find that immigration triggered hostile political reactions, such as the election of more conservative legislators, higher support for anti-immigration legislation, and lower redistribution. Exploring the causes of natives’ backlash, I document that immigration increased natives’ employment, spurred industrial production, and did not generate losses even among natives working in highly exposed sectors. These findings suggest that opposition to immigration was unlikely to have economic roots. Instead, I provide evidence that natives’ political discontent was increasing in the cultural differences between immigrants and natives. Results in this article indicate that, even when diversity is economically beneficial, it may nonetheless be socially hard to manage.

/pdf/gifts-of-the-immigrants-woes-of-the-natives-lessons-from-the-1a7t7fl9h1.pdf

Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration

https://www.econstor.eu/bitstream/10419/176864/1/wp-2017-244-edo-etal-immigration-electoral-support.pdf

Immigration and electoral support for the far-left and the far-right

A large literature exploits geographic variation in the concentration of immigrants to identify their impact on a variety of outcomes. To address the endogeneity of immigrants' location choices, the most commonly-used instrument interacts national inflows by country of origin with immigrants' past geographic distribution. We present evidence that estimates based on this "shift-share" instrument conflate the short- and long-run responses to immigration shocks. If the spatial distribution of immigrant inflows is stable over time, the instrument is likely to be correlated with ongoing responses to previous supply shocks. Estimates based on the conventional shift-share instrument are therefore unlikely to identify the short-run causal effect. We propose a "multiple instrumentation" procedure that isolates the spatial variation arising from changes in the country-of-origin composition at the national level and permits us to estimate separately the short- and long-run effects. Our results are a cautionary tale for a large body of empirical work, not just on immigration, that rely on shift-share instruments for causal inference.

/pdf/shift-share-instruments-and-the-impact-of-immigration-2vxbrpna96.pdf

Shift-Share Instruments and the Impact of Immigration

The world currently has more refugees and internally displaced persons than it has had since World War II. Yet the readiness of many wealthy countries to provide asylum to these refugees is waning, and a major reason for this is the fiscal burden that would result from larger refugee intakes. To evaluate the size of this fiscal burden, this study estimates the net fiscal redistribution to the total refugee population in Sweden, the country with the largest per capita refugee immigration rate in the Western world since the early 1980s. The total redistribution in 2007 corresponds to 1.0 percent of Swedish GDP in that year. Four-fifths of the redistribution is due to lower public per capita revenues from refugees compared with the total population, and one-fifth to higher per capita public costs.

The Fiscal Cost of Refugee Immigration: The Example of Sweden

With the expansion of the European Union from 15 to 25 member countries in 2004, fears of migrants’ excessive welfare use led 14 of the 15 older member countries to impose restrictions on the access of citizens of the new member countries – the A10 countries – to their welfare systems. Sweden was the only exception. This paper evaluates the net contribution of post-enlargement A10 immigrants to Swedish public finances in 2007. On average, A10 immigrants generate less public revenue than the population on average, but they also cost less. The net result is a zero or small positive net contribution. In particular, A10 immigrants do not benefit more from basic social welfare than the population on average. The discounted net contribution over the A10 immigrants’ lifetimes may be positive or negative depending, for example, on their income assimilation rates and on future real interest rates.

Joakim Ruist

Papers

Shift-Share Instruments and the Impact of Immigration

Shift-Share Instruments and the Impact of Immigration

The Fiscal Cost of Refugee Immigration: The Example of Sweden

Free Immigration and Welfare Access: The Swedish Experience

Immigrant–native wage gaps in time series: Complementarities or composition effects?