- | Thursday, December 1
- 12:15 PM
- Kaiserplatz 7-9, 4th floor, Room 4.006
Immigration, Voting, and Redistribution: Evidence from Post-war Population Transfers
In this paper, we study how immigration affects redistribution at the local level, exploiting a large and sudden population transfer as a natural experiment. In the late 1940s, 8 million forced migrants arrived in West Germany; these were culturally similar to West Germans, had voting rights, but owned no assets.We find that areas with higher immigrant inflow significantly raised taxes on profits, capital and farmland, while we find no differential change for taxes on non-agricultural land and a firm’s wage bill. Exploring voting as a potential channel, we find that high-inflow areas had higher vote shares for left-wing parties. These results are consistent with the Meltzer/Richard model of inequality and redistribution, suggesting that the mass inflow of poor people triggered tax increases as the median voter shifted towards poorer people.