Love Thy Neighbor: Hate Crime in a Time of Crisis

Abstract: This paper explores whether the increase in hate crime in Sweden following the Migrant Crisis in 2015 can be explained by changes in ethnic composition or income inequality. We use an event study methodology and data from Swedish municipalities to test how well these structural factors, supported by theory, can explain hate crime rates. Our analysis empirically confirms that hate crime per 10 000 citizens increased in 2015 in conjunction with the crisis, indicating that changes in ethnic composition played a role in the increase. However, our results do not show any evidence that more drastic changes in ethnic composition would lead to higher hate crime rates, as all municipalities in our sample initially respond the same to the inflow of immigrants. Instead, our findings suggest that greater changes in the share of foreign population have a dissipative effect on hate crime in 2016. When we split the sample based on the degree of income inequality, we discover that the increase in hate crime rates is only present among municipalities with high income inequality. This implies that income inequality could be considered one of the economic conditions conducive to hate crime. Our findings provide interesting insights regarding the complex relationship between ethnic composition, income inequality, and hate crime in Sweden, highlighting the need for further research in this area.