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Ethnic Diversity and Informal Work in Ghana

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  • Sefa Awaworyi Churchill
  • Michael Danquah

Abstract

We present the first study that examines the effects of ethnic diversity on informal work. Using two waves of data from the Ghana Socioeconomic Panel Survey, we find that ethnic diversity is associated with a higher probability of engaging in informal work. Specifically, our instrumental variable estimates suggest that a unit increase in ethnic diversity is associated with up to a 16.7 percentage point increase in the probability of engaging in informal work. This result is robust to alternative estimation approaches and alternative ways of measuring ethnic diversity. Our results also show that trust, which is lower in ethnically diverse neighbourhoods, is an important channel through which ethnic diversity operates to increase the probability of engaging in informal work. Our results point to the need for policies that promote trust between diverse ethnic groups in heterogeneous societies.

Suggested Citation

  • Sefa Awaworyi Churchill & Michael Danquah, 2022. "Ethnic Diversity and Informal Work in Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 58(7), pages 1312-1331, July.
    • Handle: RePEc:taf:jdevst:v:58:y:2022:i:7:p:1312-1331
    DOI: 10.1080/00220388.2022.2061852
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    Cited by:

    1. Ben Atta, Oussama & Chort, Isabelle & Senne, Jean Noël, 2022. "Immigration, integration, and the informal economy in OECD countries," GLO Discussion Paper Series 1197, Global Labor Organization (GLO).

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