Does inequality foster xenophobia? Evidence from the German refugee crisis

Abstract

ABSTRACT Why does immigration trigger xenophobic backlash in some regions but not in others? This study focuses on economic inequality as a moderator of backlash against immigration. Drawing on prior cross-national work, I argue that inequality fosters a sense of relative deprivation among natives, increases incentives for national identification, and thereby amplifies xenophobic backlash against immigration. I test this argument in Germany, which experienced an unprecedented influx of refugees starting in 2015. My empirical analysis combines complete tax registry data for about 40 million households with geocoded information on xenophobic hate crimes. Using a difference-in-differences approach, I find that the increase in hate crimes following the refugee inflow was significantly stronger in high-inequality localities. In addition, I provide survey-based evidence that local economic inequality increases nationalism among natives. My findings shed new light on the connection between rising levels of economic inequality and xenophobia across Western democracies.