# **1 Introduction**

In the first half of 2020, the UNHCR reported over 80 million people as forcibly displaced, and expects this trend to continue in the near future (UNHCR, 2020). Although the constitutions of many countries guarantee protection for people fleeing from conflicts and wars, hosting refugees remains a divisive policy issue. On the one hand, governments view hosting refugees as a moral obligation. If countries of origin cannot guarantee the safety of their citizens, other countries have the humanitarian duty to provide protection, and State parties that signed the Refugee Convention of 1951 also have a legal obligation to do so. However, hosting and integrating refugees comes with economic and social challenges. Common economic and social concerns about the effects of immigration also apply to refugee inflows: natives may worry about the effect on the labor market, the welfare state, or crime. Moreover, natives may perceive refugees as outsiders, which may spur xenophobia and undermine the social fabric of the country.

In this paper, we investigate whether hosting refugees affects social cohesion in a major receiving country. We study the case of Germany, which recently welcomed over one million asylum seekers and refugees from Syria, Afghanistan and the Western Balkans. Although the inflow initially received broad support in the German population, attitudes towards refugees in parts of society drastically changed after a series of events on New Year’s Eve 2015/16. The most salient incident occurred in Cologne, where around 600 women were sexually assaulted, with some of the perpetrators being recently arrived asylum seekers. This event, along with the growing general discontent about the country’s immigration policy is often seen as an accelerator for the growth of the far-right movement in Germany (Gedmin, 2019).

To study the impact of the refugee inflow in 2015/16 on social cohesion, we use data from a large-scale panel survey as well as regional data on incidents of anti-immigrant violence. We measure social cohesion along several dimensions, namely generalized trust, perceived fairness, attitudes towards foreigners, and anti-immigrant violence. To separate causality from correlation, we exploit the fact that asylum seekers in Germany are assigned across federal states based on a formula that takes into account the state’s population and tax revenues several years prior. This means that, for reasons unrelated to the current economic and social climate, some regions receive more asylum seekers than others. Moreover, the panel data allow us to track individuals’ attitudes over time, and compare _changes_ in attitudes between people residing in high- versus low-inflow areas. This addresses many potential concerns about causality, for example that people who are more welcoming to foreigners are more likely to live in areas that also attract many foreigners.

We document two sets of results. First, in individual-level survey data we find limited evidence that the refugee inflow affected self-reported measures of social cohesion. Neither descriptive graphs nor a difference-in-difference analysis show significant differences in attitudes and values between people living in areas with high versus low inflows of refugees. The only significant effect we find is a deterioration in attitudes towards immigrants. Second, we find that the local presence of refugees increases the incidence of anti-immigrant violence. While the incidence evolved similarly in high and low-inflow counties before the inflow, it increased disproportionately in high-inflow counties. This increase was mainly driven by attacks on refugee accommodation, and is concentrated among the top 10% of municipalities with the largest inflows of refugees. Moreover, the effect is stronger in 1