Immigration, Ethnic Diversity and Political Outcomes: Evidence from Denmark

I study the impact of immigration and ethnic diversity on political outcomes in immigrant receiving countries, focusing on the case of election outcomes and immigration in Danish municipalities 1981-2001. A rich set of control variables isolates ethnic diversity effects from that of other immigrant characteristics and a novel IV strategy based on historical housing stock data addresses issues of endogenous location choice of immigrants. Immigration-driven increases in ethnic diversity improve electoral outcomes for anti-immigrant nationalist parties. Increased nationalist success comes primarily at the expense of traditional left-wing parties, although to a lesser extent possibly also at the expense of the non-nationalist right-wing parties. The effect of immigration and ethnic diversity does not diiffer between municipal and national elections, despite the very dierent issues decided at the two levels of government.