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Is Tolerance Good or Bad for Growth?

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  • Berggren, Niclas

    ()
    (The Ratio Institute)

  • Elinder, Mikael

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

We investigate to what extent tolerance, as measured by attitudes toward different types of neighbors, affects economic growth. Data from the World Values Survey enable us to investigate tolerance–growth relationships for 54 countries. We provide estimates based on cross-sectional as well as panel-data regressions. In addition we test for robustness with respect to model specification and sample composition. Unlike previous studies, by Richard Florida and others, we find that tolerance toward homosexuals is negatively related to growth. For tolerance toward people of a different race, we do not find robust results, but the sign of the estimated coefficients is positive, suggesting that inclusion of people irrespective of race makes good use of productive capacity. We propose mechanisms to explain these divergent findings, which clarify why different kinds of tolerance may be of different economic importance.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 846.

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Length: 34 pages
Date of creation: 16 Aug 2010
Date of revision:
Publication status: Published as Berggren, Niclas and Mikael Elinder, 'Is Tolerance Good or Bad for Growth?' in Public Choice, 2012, pages 283-308.
Handle: RePEc:hhs:iuiwop:0846

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Keywords: Tolerance; Growth; Diversity; Human Capital; Creativity; Innovatio;

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Cited by:
  1. Berggren, Niclas & Nilsson, Therese, 2014. "Globalization and the Transmission of Social Values: The Case of Tolerance," Working Paper Series 1007, Research Institute of Industrial Economics.
  2. Bomhoff, Eduard & Lee, Grace HY, 2012. "Tolerance and economic growth revisited: A note," MPRA Paper 52557, University Library of Munich, Germany.
  3. Niclas Berggren & Mikael Elinder, 2012. "Tolerance and growth: modeling the empirical relationship," Public Choice, Springer, vol. 153(3), pages 495-502, December.
  4. Berggren , Niclas & Nilsson, Therese, 2012. "Does Economic Freedom Foster Tolerance?," Working Papers 2012:10, Lund University, Department of Economics.
  5. Christian Bjørnskov & Pierre-Guillaume Méon, 2010. "The productivity of trust," Working Papers CEB 10-042, ULB -- Universite Libre de Bruxelles.

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