Does immigration hurt support for the welfare state?

May 5, 2013

Poli-Sci Perspective is a weekly Wonkblog feature in which Georgetown University's Dan Hopkins and George Washington University's Danny Hayes and John Sides offer an empirical perspective on the issues dominating Washington. In this edition, Hopkins looks at whether increased immigration leads to decreased support for the welfare state. For past posts in the series, head here.

Here in the United States, opponents of immigration reform frequently talk about the dangers of rewarding people who came without authorization or the prospect that immigrants might take jobs from native-born Americans. But there is another concern about immigration that they don’t typically raise, one that you are more likely to hear from the European left than the American right: that immigration undermines the social welfare state by making voters less supportive of public spending.

The logic behind this argument is simple. Writing in the Guardian, David Goodhart contends that “if newcomers do not make some effort to join in it is harder for existing citizens to see them as part of the `imagined community’. When that happens it weakens the bonds of solidarity and in the long run erodes the 'emotional citizenship’ required to sustain welfare states.”

The striking thing about the United States, though, is that increasing ethnic and racial diversity hasn’t dampened our public investments.

We can study this by looking at U.S. cities. American municipalities vary markedly in their ethnic and racial demographics, and they routinely make decisions about how to allocate scarce dollars. But when we examine cities’ spending patterns in recent decades, we see that growing diversity has done little to change public good provision. Your public library is likely to have seen cutbacks, but it’s probably not because of your neighbors’ backgrounds.

In 1999, Alberto Alesina, Reza Baqir and William Easterly got many social scientists interested in these questions with an article showing that more diverse U.S. cities spent less on public goods like roads. For readers with a political bent, that finding will seem surprising, since many of America’s most diverse cities are also among its most liberal. As always, though, the challenge is in sorting causation from correlation. Cities that attracted people from various ethnic and racial backgrounds also tend to differ in their economies, poverty levels,  partisanship and a host of other ways.

One way to get at the question of causation is by leveraging time: we can observe if changes in ethnic and racial diversity correspond with changes in how U.S. cities spend their money. That’s exactly what I do in a 2012 articleConsider the period from 1970 to 2000, when both immigration and suburbanization were transforming the populations of American cities. Overall, those decades saw significant declines in city spending on various public goods, including roads, health and sanitation. The table below makes those shifts in municipal spending clear.

Among the 1,000 largest U.S. cities, those that rapidly diversified saw the same changes in their spending on those categories as did cities that did not diversify. The same holds true for spending on housing, which grew regardless of demographic changes. In fact, the only noteworthy difference is in criminal justice spending: cities that became more diverse spent more fighting crime. That’s true even when accounting for crime rates.

So how do diverse cities manage to sustain public spending  In a 2011 article, Jacob Rugh and Jessica Trounstine show that while diverse cities hold fewer bond elections, the bonds they do pass are larger and cover a broader range of projects. It’s not just voters who react to demographic changes. In diverse communities, Rugh and Trounstine argue that political leaders respond by building broader coalitions in support of public projects. The impact of growing diversity hinges not just how voters react, but also on the strategies of local leaders.

A long tradition of research has shown that changing demographics can shape voters’ attitudes. But that’s only part of the equation. To assess the impact of ethnic and racial diversity, it’s critical to account for the views of the newcomers as well as the reactions of local politicians. In the contemporary U.S., growing diversity often means growth among Democratic-leaning groups, and it can lead local politicians into broader alliances.  In recent decades, there has been undeniable pressure on city budgets. But that pressure isn’t more acute in the cities that are diversifying. Demographics are not destiny.

Dan Hopkins is an Associate Professor of Government at Georgetown University. His research and teaching focus on American politics, with special attention to public opinion, urban politics, racial and ethnic politics, and quantitative methods. More on his research is available at www.danhopkins.org.
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