Seminar The social capital impact of immigration: evidence from the EU enlargement

Abstract

Does immigration undermine social capital? We address this question by exploiting the large immigration shock that followed the United Kingdom’s mid-2000s EU enlargement. Using rich individual-level data from 1998 to 2014, we examine changes in neighbourhood cohesion, community service, social life, interpersonal trust, and institutional trust. Employing a difference-in-differences strategy and an enclave instrument, we find no evidence that social capital eroded in areas more exposed to immigration. On the contrary, immigration appears to have had a positive effect on neighbourhood cohesion and generalised trust. These effects, however, are highly heterogeneous. Positive responses are concentrated among highly educated, mobile, and socially liberal individuals. In contrast, districts with particularly high levels of population homogeneity prior to the enlargement experienced declines in social cohesion. Together, the results suggest that the social impact of immigration is contingent on both individual dispositions and local context.