Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2013:5: Ethnic Diversity and Preferences for Redistribution: Reply

Matz Dahlberg (), Karin Edmark () and Heléne Lundqvist ()
Additional contact information
Matz Dahlberg: Uppsala University; CESifo; IEB; IFAU; UCFS; UCLS., Postal: Department of Economics, Uppsala University, P.O. Box 513, S-751 20 UPPSALA, SWEDEN,
Karin Edmark: IFN; CESifo; IFAU; UCFS; UCLS., Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Heléne Lundqvist: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden

Abstract: In a comment to Dahlberg, Edmark and Lundqvist (2012), Nekby and Pettersson-Lidbom (2012) argue (i) that the refugee placement program should be measured with contracted rather than actually placed refugees, and claim that the correlation between the two measures is insignificant and close to zero; (ii) that instead of using the rotating individual panel, we should have used the full cross-sections in combination with municipality fixed effects; and (iii) that immigrants should be defined based on country of birth rather than citizenship. In this response, we discuss why we (i) do not agree that contracted refugees is the preferred measure, and we show that the correlation between the two measures is highly significant and large; (ii) do not agree that the full cross-sections can be used; and (iii) do agree that defining immigrants according to country of birth is preferred. In a re-analysis, the conclusion from Dahlberg, Edmark and Lundqvist (2012) that ethnic diversity has a statistically and economically significant negative effect on preferences for redistribution is only marginally affected.

Keywords: Income redistribution; ethnic heterogeneity; immigration

JEL-codes: D31; D64; I38; Z13

23 pages, February 12, 2013

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