The paper studies effects of labor market competition with immigrants, net from other long-term contextual factors. While many studies distinguish between exposure to immigrants and direct contact with them, few have been able to isolate the specific effects of labor market competition when social and economic integration is absent. Labor economists have found that a sudden influx of immigrants can have negative short-term effects on employment and wages, although these effects can be reversed when immigrants boost demand and contribute to the local economy. This paper seeks to address this gap by examining the central question: How does labor market competition affect political outcomes when immigrants are socially and economically non-integrated?

I argue that many empirical studies conflate the short- and long-term effects of immigration, which can obscure negative reactions of workers directly exposed to labor market competition. To investigate this, I examine a unique immigration shock that occurred in Germany in 1991. Concretely, a policy was implemented that allowed Czech workers to commute to jobs in Germany without granting them residency rights. This allows me to isolate the effects of labor market competition without considering other long-run countervailing factors. Since only municipalities in the border with the Czech Republic were affected, I use a (synthetic) difference-in-differences approach. Doing so I analyze how municipalities affected by this policy voted in the 1994 election compared to other municipalities that were not affected. To investigate possible mechanisms, I use the German Socio-Economic Panel, showing an increase perception of job loss risk.