R. Quentin Grafton (Senior Fellow, Centre for Resource and Environmental Studies, Australian National University) Stephen Knowles (Senior Lecturer in Economics, University of Otagio, New Zealand) P. Dorian Owen (Professor of Economics, University of Otagio, New Zealand)
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In this chapter, Quentin Grafton, Stephen Knowles and Dorian Owen examine the implications for productivity arising from the level of social diversity along a variety of dimensions, including ethnic, linguistic and religious differences and inequalities between rich and poor. Their basic intuition is that human beings tend to associate and communicate most readily with people similar to themselves, and their hypothesis is therefore that "social divergence" generates social barriers to communication among groups, inhibiting the diffusion of knowledge and lowering the level of productivity in the economy. As a consequence, the more diverse the society and the greater the number of distinct social groups, the higher are the communication costs and the greater are the barriers to the exchange of ideas and innovation.
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ReDIF This chapter was published in: Andrew Sharpe, Executive Director & France St-Hilaire, Vice-President , Research & Keith Banting, Director (ed.) The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity, Centre for the Study of Living Standards, pages , 2002.
Find related papers by JEL classification: Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
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