Does Immigration Decrease Far-Fight Popularity? Evidence from Finnish Municipalities

Across Europe, far-right parties have made signi ficant electoral gains in recent years, posing aserious threat to the European integration process. Their anti-immigration stance is consideredone of the main factors behind their success. Yet, the causal evidence on how immigrationaffects far-right voting is still relatively scarce. Using data from Finland, this paper studiesthe effect of immigration on voting for the far-right Finns Party on a local level. Exploiting aconvenient setup for a shift-share instrument, I find that one percentage point increase in theshare of foreign citizens in municipality decreases Finns Party's vote share by 3.4 percentagepoints. A placebo test using pre-period data confi rms this effect is not driven by persistenttrends at the municipality level. The far-right votes lost to immigration are captured by the twopro-immigration parties. In addition, immigration is found to increase voter turnout while theprotest vote remains unaffected. Turning to potential mechanisms, the negative effect is onlypresent in municipalities with high initial exposure to immigrants. Moreover, I provide someevidence for welfare-state channel as a plausible mechanism behind the main result.