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The Perception of Financial Inferiority Nurtures Negative Attitudes Towards Foreigners

When people feel that their own economic status is inferior to the economic status of a relevant peer group, it becomes more likely that they develop negative attitudes towards foreigners. This link was found in a new study of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association. The effect is particularly strong with respect to foreigners from low-wage countries.

Authors Walter Hyll

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Dr Walter Hyll
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Keywords

East Germany social comparisons attitudes towards foreigners natural experiment

Related Publications

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Social Comparisons and Attitudes towards Foreigners. Evidence from the ‘Fall of the Iron Curtain’

Walter Hyll Lutz Schneider

in: IWH Discussion Papers, 12, 2016

Abstract

We exploit the natural experiment of German re-unification to address the question whether distress from social (income) comparisons results in negative attitudes towards foreigners. Our empirical approach rests upon East German individuals who have West German peers. We use the exogenous variation of wealth of West German peers shortly after the fall of the Berlin Wall as an instrument to identify the effect of distress from social comparisons on East Germans’ attitudes. We find robust evidence that East Germans expose strong negative attitudes towards foreigners, particularly from low-wage countries, if they worry about their economic status compared to better-off peers.

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