The Electoral Consequences of Restricting Labor Market Access for Refugees: Evidence from Germany

Abstract

Governments across Europe are restricting labor market access for asylum seekers, with often detrimental consequences for the livelihood of refugees and the public finances of host societies. This raises the following questions: Are the benefits of restrictive immigrant policies political rather than economic, and do incumbent governments receive an electoral edge by implementing such policies? In this paper, we exploit a natural experiment in Germany, where, following a deterministic assignment rule, certain regions were exempted from a reform that liberalized labor market access for refugees. Using difference-in-difference and regression discontinuity designs, we find that the incumbent vote share sharply increases in regions with restrictive labor market access. Exploring different mechanisms, our results suggest that this effect is primarily driven by differential candidate entry: In regions with restrictive labor market access, fewer conservative and populist challengers are running for office. Our results suggest that not only do immigration inflows have direct electoral repercussions, but immigrant policies do also.

Type
Preprint