Applied Micro Seminar - "Immigration and Social Capital"

Abstract: Does immigration undermine social cohesion? This paper examines this question by leveraging the large immigration shock following the mid-2000s EU enlargement, which led to a significant influx of Eastern European immigrants. Using rich individual-level data from the United Kingdom on social participation, political engagement, interpersonal trust, and institutional trust—combined with a difference-in-differences approach—we find no evidence that social capital eroded in communities more exposed to immigration. On the contrary, our results indicate a positive impact on various dimensions of social capital. These positive effects are driven by more educated individuals at the individual level and by wealthier, more urbanized areas at the aggregate level, highlighting the interplay between economic and cultural factors in shaping native responses to immigration.