Using panel data (obtained by merging the General Social Survey and the US Census and American Community Survey) to analyze evidence from US Metropolitan Areas, from 1984 to 2006, investigators will determine whether the presence of immigrants affects the level of trust of natives and, in turn, the provision of local public goods in US cities.

Previous literature has found a negative correlation between ethnic fractionalization at the city level and trust and, in turn, a negative correlation with the propensity to provide local public goods and to donate to charities. However, researchers are applying better data and a better identification strategy to the question. In particular, they use the panel dimension and within-city variation in the share of immigrants over time as driving changes in ethnic fractionalization. Moreover, they use the historical presence of immigrant communities (as of 1970) of different nationality as instrument for the subsequent change in immigrants.

Peri notes that the provision of local “productive” public goods, especially schooling, is crucial to reduce poverty in the long-run. If the presence of immigrants makes natives less willing to trust others and more likely to limit the provision of local public goods (and rely on private provision instead) this may have a negative impact on poverty and its inter-generational transmission.