Immigration and the Future of the Welfare State in Europe

Published date01 September 2021
DOI10.1177/00027162211055409
Date01 September 2021
120 ANNALS, AAPSS, 697, September 2021
DOI: 10.1177/00027162211055409
Immigration
and the Future
of the Welfare
State in Europe
By
ALBERTO ALESINA,
JOHANN HARNOSS,
and
HILLEL RAPOPORT
1055409ANN THE ANNALS OF THE AMERICAN ACADEMYIMMIGRATION AND THE FUTURE OF THE WELFARE STATE IN EUROPE
research-article2021
We analyze the effect of immigration on attitudes toward
income redistribution in twenty-eight European coun-
tries over the period 2002 to 2012, before the “refugee
crisis.” We find that native workers lower their support
for redistribution if the share of immigration in their
country is high. This effect is larger for individuals who
hold negative views regarding immigration but is
smaller when immigrants are culturally closer to natives
and come from richer-origin countries. The effect also
varies with native workers’ and immigrants’ education:
more educated natives support more redistribution if
immigrants are also relatively educated. Overall, our
results show that the negative effect of immigration on
attitudes toward redistribution is relatively small and is
counterbalanced among skilled natives by positive
second-order effects for the quality and diversity of
immigration.
Keywords: immigration; welfare state; redistribution;
attitudes
Research on population diversity in the
United States suggests that ethnic and
racial diversity undermine social trust and soli-
darity (Putnam 1995), which in turn negatively
influence attitudes toward income redistribu-
tion (Luttmer 2001; Alesina and Glaeser 2004).
As a result, one can observe a clear negative
empirical relationship in the United States
between ethnic diversity and redistribution, for
Alberto Alesina was the Nathaniel Rope Professor of
Political Economy in Harvard University’s Department
of Economics, which he chaired from 2003 to 2006. He
was a leader in the field of political economics and had
extensively published in all major economics journals.
He was the director of the NBER program in political
economy and a research fellow at IGIER, Bocconi
University.
Johann Harnoss is associate director for innovation at
the Boston Consulting Group, based in Berlin. Together
with Alesina and Rapoport, he published “Birthplace
Diversity and Economic Prosperity” in the Journal of
Economic Growth in 2016.
Correspondence: Hillel.rapoport@psemail.eu
IMMIGRATION AND THE FUTURE OF THE WELFARE STATE IN EUROPE 121
example, for measures such as municipal-level public goods provision (Alesina,
Baqir, and Easterly 1999) or welfare payments across U.S. states (Alesina and
Glaeser 2004). Is this also true for Europe?
In his influential book, Exodus, Paul Collier (2013) uses the findings from the
U.S. context to assert a similar relationship in Europe. This article suggests that
such a transposition masks important heterogeneities and is thus not necessarily
valid. For one thing, Europe and the United States differ in many respects and
stand as antipodes to one another on issues such as immigration and redistribu-
tion. The United States is often portrayed as a “land of opportunity”; while
Europe, we are told, is a “land of redistribution” (Boeri 2010). And, indeed, the
United States is still relatively welcoming to immigrants and averse to high levels
of redistribution; while Europe, in contrast, is still relatively closed to non-Euro-
pean immigration but relatively generous in terms of social support for anyone
who has made it through its borders. However, Europe is slowly becoming a
much more diverse place. Since the beginning of the twenty-first century,
Europe has seen a large increase in the number of its immigrants, leading some
to predict the end of the European welfare state (Collier 2013).
This article takes this assertion seriously and submits it to an empirical test.
Focusing on the period 2002 to 2012, just before the European “refugee crisis,”
we show that the negative effects of ethnic/racial diversity on trust and redistribu-
tion in the context of the United States cannot be simply transposed to the EU
context. Instead, our results suggest that immigration (its size and skill composi-
tion) and the diversity arising from it do not necessarily translate into lower atti-
tudinal support for redistribution. We focus on 2002 to 2012 for two reasons.
First, and less importantly, the immigration data are not yet fully consolidated for
the census rounds of 2010, while they are for the 1990 and 2000 rounds. Second,
and more substantially, refugees are arguably a special type of immigrant. The
humanitarian nature of asylum migration, its massive extent over a short period,
and its strong concentration over a handful of countries make it an experience
worthy of exploration in its own right. In this article we are interested in docu-
menting a long-term relationship between relatively persistent variables and,
therefore, focus on the period before the shock.
A rich literature exists that seeks to explain social preferences based on individual-
level determinants.1 Median-voter models suggest that an individual’s income
relative to average income is a key determinant of such preferences (Meltzer and
Hillel Rapoport is a professor of economics at the Paris School of Economics, University Paris
1 Panthéon -Sorbonne, and a scientific advisor at CEPII and LISER. Prior to joining P SE in
2013, he held positions at the University of Lille and at Bar-Ilan University and visiting posi-
tions at Stanford University and at Harvard University. He is one of the leading scholars in the
field of migration economics.
NOTE: Alberto Alesina passed away in May 2020. We dedicate this article to his memory. Our
thanks go to Francesc Ortega, Giovanni Peri, Thomas Piketty, Isabelle Ruiz, Ekaterina
Zhuravskaya, and to seminar participants at the Paris School of Economics, University Paris 1
Panthéon-Sorbonne, at the 18th ENSAI Economic Days, May 2015; and at the “Migration and
Cognitions” online workshop, December 2020, for helpful comments and suggestions. An
earlier version of this article appeared as PSE Working Paper 2018-04.

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