Refugee Crisis, Flight to Safety and Entrepreneurship

Nicolas Ajzenman (Sciences Po)
Cevat Aksoy (EBRD)
Sergei Guriev (EBRD)

Abstract : While large empirical literature analysed the impact of migration on labour market outcomes of natives, its impact on the entrepreneurship behaviour of the native population has been largely neglected. Using massive refugee inflow to Europe in 2016 as a source of exogenous variation in exposure to mass migration, we find that entrepreneurial activity of natives in the affected transit localities falls considerably compared to the localities that are not affected by mass migration. Our instrumental variable estimates also suggest a substantial fall in natives’ entrepreneurial activity. We provide several additional analyses to understand mechanisms at play and to show heterogeneity in the entrepreneurial responses by population subgroups. Our results are primarily driven by young and middle-aged men (especially in between their late thirties and late fifties). We also find that risk aversion is the main mechanism explaining the fall in entrepreneurial activity.

Immigration and Redistribution

Alberto Alesina (Harvard University)
Armando Miano (Harvard University)
Stefanie Stantcheva (Harvard University)

Abstract : We design and conduct large-scale surveys and experiments in six countries to investigate how natives perceive immigrants and how perceptions influence their preferences for redistribution. We find strikingly large biases in natives' perceptions of the number and characteristics of immigrants: in all countries, respondents greatly overestimate the total number of immigrants, think immigrants are culturally and religiously more distant from them, and are economically weaker - less educated, more unemployed, poorer, and more reliant on government transfers - than is the case. Given the very negative baseline views that respondents have of immigrants, simply making them think about immigration first and then redistribution in a randomized manner makes them support less redistribution, including actual donations to charities. We also experimentally show respondents information about the true i) number, ii) origin, and iii) "hard work" of immigrants in their country. Information on the "hard work" of immigrants generates more support for redistribution.

Immigration and Preferences for Redistribution in Europe

Alberto Alesina (Harvard University)
Elie Murard (IZA)
Hillel Rapoport (Paris School of Economics)

Abstract : We examine the relationship between immigration and attitudes to redistribution using a newly assembled data set of immigrant stocks for 140 regions of 16Western European countries. We combine census and population register records with attitudinal data from the biannual 2002-2016 rounds of the European Social Survey. Exploiting within-country variations in the share of immigrants at the regional level, we nd that native respondents display lower support for redistribution when the share of immigrants in their residence region is higher. This negative association is driven by regions of countries with relatively large Welfare-States and by respondents at the center or at the right of the political spectrum. The eects are also stronger when immigrants originate from Middle-Eastern countries, are less skilled than natives, and experience more residential segregation. We show that these results are unlikely to be driven by immigrants' endogenous location choices ("welfare magnets") or by native respondents' sorting in terms of political aliations.

Refugees and Social Capital: Evidence from Northern Lebanon

Anselm Rink (University of Konstanz)
Justin Valasek (Norwegian School of Economics (NHH))

Abstract : Using data gathered in Northern Lebanon, we analyze the social impact of refugee settlement on the host country. Despite concerns that refugee settlements may result in intensified ethnic conflict and a decrease in out- group social capital, we find that exposure to refugees has a positive impact on native’s reported measures of trust and prosocial preferences toward refugees. Moreover, exposure to recent refugees has a positive spillover effect on other migrant groups: we find that Lebanese natives with a greater degree of exposure to Syrian refugees report higher levels of trust towards Palestinian refugees. Lastly, we show that Lebanese respondents primed to think about the impact of refugees on Lebanon report lower levels of trust towards refugees. However, this effect is driven entirely by respondents with low exposure to refugees, suggesting the exposure also makes individuals robust to responding negatively to the social discourse of the refugee crisis.