Immigration vs. Poverty: Causal Impact on Demand for Redistribution in a Survey Experiment

Abstract

Demand for and provision of redistributive public intervention, which had in the recent past given way to immigration in the political arena, bounced force-fully back at the onset of the economic consequences of the Covid pandemic. We investigate how demand for both the financing and the provision of redistribution is affected by immigration and poverty. Information about immigration has a negative impact on demanded redistributive taxation among high income respondents and a positive one among low income earners. Information about poverty has no impact. On the provision side, high income respondents increase desired public education expenditure in response to poverty, while low income respondents reduce desired education spending in response to immigration. These heterogeneities are consistent with protectionist reactions to immigration and poverty.