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It is commonplace to expect that increasing inflows of immigrants can pose new challenges for both the supply of welfare services and citizens’ support of welfare policies. In an influential study, Alesina and Glaeser (2004) compare redistribution patterns in Europe and the United States and focus on racial heterogeneity as a key explanatory factor for significant differences in the redistributive role of the state on both sides of the Atlantic. They specifically argue that “if Europe becomes more heterogeneous due to immigration, ethnic divisions will be used to challenge the generous welfare state” (Alesina and Glaeser 2004, 11). 1
Which mechanisms explain the negative effect of immigration on native support for welfare states, and can certain institutional characteristics of social policies mitigate or exacerbate this effect? While there seems to be a general consensus that immigration and support for redistribution tend to be negatively correlated (Alesina, Glaeser and Sacerdote 2001; Luttmer 2001; Lind 2007; Dahlberg, Edmark and Lundqvist 2012), the specific causal mechanism behind this relationship is far from being settled. Moreover, an emerging body of literature points to a number of demographic, economic, and political factors moderating the relationship between immigration and support for social policy (Soroka et al. 2004; Crepaz 2006; van Oorschot 2006; Crepaz 2008; Finseraas 2008; Larsen 2008; Crepaz and Damron 2009; Mau and Burkhardt 2009; Eger 2010). This literature, however, has obtained conflicting results claiming both high and low effects of institutions. Moreover, the validity of previous studies mainly based on observational data has been challenged by a potentially endogenous relationship between attitudes and institutional settings.
In this paper, we argue for a policy heterogeneity approach and expect means-tested social policies to exacerbate the negative impact of immigration on support for social policy. On the basis of the distinction between self-regarding and other-regarding preferences for redistribution (Cavaillé and Trump 2015), we hypothesize that the importance of the latter can increase in policy settings targeting resources to recipients that are less representative of the population. While in universal programs all social groups benefit equally from transfers, the identity of the recipient becomes a more relevant trait when deciding to support means-tested policies that benefit some social groups and not others.
Our analytical strategy consists of manipulating the universal versus means-tested design...