The European Welfare States? Migration, Ethnic Diversity and Public Goods”. I am particularly indebted to

I study the impact of immigration and increasing ethnic diversity on political outcomes in immigrant-receiving countries, focusing on immigration and election outcomes in Danish municipalities 1981-2001. A novel IV strategy based on historical housing stock data ad-dresses issues of endogenous location choices of immigrants and a rich set of control variables is employed to isolate ethnic diversity effects from those of other immigrant characteristics. Increases in local ethnic diversity lead to rightward shifts in election outcomes by shift-ing electoral support away from traditional ”big government ” left-wing parties and towards anti-immigrant nationalist parties. This holds for both local and national elections