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Birthplace Diversity and Economic Prosperity

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  • Alberto Alesina

    ()
    (Harvard University and IGIER Bocconi)

  • Johann Harnoss

    (EQUIPPE, University of Lille, Harvard University and HWWI Hamburg)

  • Hillel Rapoport

    ()
    (Bar-Ilan University, EQUIPPE and Center for International Development, Harvard University)

Abstract

The diversity of people has economic costs and benefits. Using recent immigration data from 195 countries, we propose an index of diversity based on people's birthplaces. This new index is decomposed into a "size" (share of foreign born) and a "variety" (diversity of immigrants) component and is available for 1990 and 2000 and for the overall as well as for the high (workers with college education) and low-skill fractions of the workforce. We show that birthplace diversity is largely uncorrelated with ethnic and linguistic fractionalization and that - unlike fractionalization - it is positively related to economic development even after controlling for education, institutions, ethnic and linguistic fractionalization, trade openness, geography, market size, and origin-effects. This positive association appears particularly strong for the diversity of skilled immigrants in richer countries. We make progress towards addressing endogeneity by specifying a gravity model to predict the diversity of immigration based on exogenous bilateral variables. The results are robust across various OLS and 2SLS specifications.

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Bibliographic Info

Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 1304.

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Date of creation: Jan 2013
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Handle: RePEc:crm:wpaper:1304

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Keywords: Birthplace diversity; ethnic diversity; economic growth; productivity; immigration.;

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  1. > International Economics > International Migration
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Cited by:
  1. Michaela Trax & Stephan Brunow & Jens Suedekum, 2012. "Cultural diversity and plant‐level productivity," Norface Discussion Paper Series 2012029, Norface Research Programme on Migration, Department of Economics, University College London.
  2. d'Albis, Hippolyte & Boubtane, Ekrame & Coulibaly, Dramane, 2013. "Immigration Policy and Macroeconomic Performances in France," MPRA Paper 50749, University Library of Munich, Germany.
  3. Casey, Gregory P. & Owen, Ann L., 2014. "Inequality and Fractionalization," World Development, Elsevier, vol. 56(C), pages 32-50.
  4. Strobl, Eric & Valfort, Marie-Anne, 2012. "The Effect of Weather-Induced Internal Migration on Local Labor Markets: Evidence from Uganda," IZA Discussion Papers 6923, Institute for the Study of Labor (IZA).
  5. Ortega, Francesc & Peri, Giovanni, 2013. "Migration, Trade and Income," IZA Discussion Papers 7325, Institute for the Study of Labor (IZA).
  6. Ortega, Francesc & Peri, Giovanni, 2014. "Openness and income: The roles of trade and migration," Journal of International Economics, Elsevier, vol. 92(2), pages 231-251.
  7. Dirk Dohse & Robert Gold, 2013. "Measuring Cultural Diversity at a Regional Level," WWWforEurope Working Papers series 10, WWWforEurope.
  8. Francesc Ortega & Giovanni Peri, 2012. "The Effect of Trade and Migration on Income," Working Papers 1213, University of California, Davis, Department of Economics.
  9. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Spatial Economics Research Centre, LSE.

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