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Income comparisons and attitudes towards foreigners - Evidence from a natural experiment

Walter Hyll and Lutz Schneider

Journal of Comparative Economics, 2018, vol. 46, issue 2, 634-655

Abstract: We exploit a natural experiment related to the German re-unification to address whether disutility from income comparisons affects attitudes towards foreigners. Our empirical approach rests upon East German individuals with West German relatives and friends. We use the exogenous variation of wealth of West Germans shortly after the fall of the Berlin Wall as an instrument to identify the effect of disutility from income comparisons on East Germans’ attitudes. We find robust evidence that East Germans express more negative attitudes towards foreigners, particularly from low-wage countries, if they worry about their economic status compared to better-off West Germans.

Keywords: Relative deprivation; Economic integration; Immigration; Natural Experiment; East Germany (search for similar items in EconPapers)
JEL-codes: D31 F22 J61 P36 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:46:y:2018:i:2:p:634-655

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