November 2017

IZA DP No. 11143: Immigrant Locations and Native Residential Preferences: Emerging Ghettos or New Communities?

While the impact of immigrants on labor markets may be small, strong political movements voicing opposition to the growth of resident foreign-born populations are on the upswing. We study whether natives voted with their feet in reaction to the largest and fastest migration shock in the OECD. The inflow, causing the population of Spain to grow by 10 percent between 1998 and 2008, represented largely a new phenomenon the size of which had not been factored into previous expectations, thereby providing quasi-experimental sources of variance. Our results show that immigrant inflows caused mild native flight from denser, established neighborhoods, but also more real estate development there. In parallel, both natives and immigrants were concurrently moving into new booming suburban communities, resulting in no changes in overall measures of ethnic segregation. In contexts where large ethnic minority arrivals spur the creation of new neighborhoods, conventional empirical methods may overstate the degree of segregationist behavior.