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Cities and Cultures

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  • Gianmarco I.P. Ottaviano

    (Università di Bologna, Fondazione Eni Enrico Mattei and CEPR)

  • Giovanni Peri

    (UC Davis and CESifo)

Abstract

We investigate the existence of wage premium due to cultural diversity across US cities. Using census data from 1970 to 1990, we find that at the urban level richer diversity is systematically associated with higher average nominal wages for white US-born males. We measure cultural diversity in a city using the variety of languages spoken by city-residents. While the positive correlation between wages and diversity survives a battery of robustness checks, it seems to be larger once foreign cultures have been assimilated. Finally, instrumental variable estimation hints at causation going from diversity to wages. Comparing real and nominal wages across cities, we interpret these results as evidence that diversity enhances productivity.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.92.

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Date of creation: May 2004
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Handle: RePEc:fem:femwpa:2004.92

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Keywords: Cultural diversity; Productivity; Wages; Metropolitan areas;

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