Latin American Brotherhood? Immigration and Preferences for Redistribution

Abstract

Preferences for redistribution are critical determinants of the size of the welfare state and, therefore, of the level of inequality in a country. In this paper, we explore the effect of immigration on preferences for redistribution in the context of migration in Latin America, where migrants tend to have characteristics more similar to those of natives. To this aim, we exploit provincial-level data from a large attitudinal survey and match it with immigration data from different sources. We follow three approaches: first, we exploit within-country variation in a cross-sectional analysis with census data; second, we estimate a fixed effects model with data from a large sample of harmonised national household surveys; and third, we exploit the massive influx of Venezuelan refugees into the border country of Colombia with an instrumental variables approach. Our results consistently suggest a significant, negative, non-monotonic relationship between the share of immigrants at the provincial level and support for redistributive policies. The effect is mainly explained by Latin American and low-skilled immigrants, and is stronger for high-income respondents.