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Diversity and local public goods: a natural experiment with exogenous residential allocation

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Author Info

  • Yann Algan

    ()
    (Sciences-Po)

  • Camille Hémet

    ()
    (Sciences-Po)

  • David Laitin

    ()
    (Stanford University)

Abstract

This paper demonstrates the effects of ethnic diversity on social relationships and the quality of public spaces at a very finite neighborhood level. We use detailed block level data on diversity and housing quality from a representative survey on housing in France. We show how and to what extent diversity among adjacent neighborhoods can affect household well-being and the quality of local public goods, whereas the previous literature looks at aggregate indicators and outcomes. Our identification strategy relies on the exogeneity of public housing allocations with respect to ethnic characteristics in France, and thereby eliminates bias due to endogenous residential sorting. Diversity is shown to have a negative effect on local public goods, either due to vandalism and to the lack of social policing, or due to collective action failure for maintenance. However, we find that diversity has no robust effect on civil conflict at a local level and, if anything, is more related to social anomie. We test the exogeneity of residential allocation across public housing blocks with respect to ethnic characteristics. We also show that our results are not driven by potential biases from self-reported well-being and that they hold even with objective measures of housing quality.

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Bibliographic Info

Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2012/24.

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Length: 61 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:ieb:wpaper:2012/6/doc2012-24

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Keywords: Ethnic diversity; social housing; social capital;

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References

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  1. Giorgio Topa & Stephen Ross & Patrick Bayer, 2005. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Working Papers 05-23, Center for Economic Studies, U.S. Census Bureau.
  2. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  3. Alberto Alesina & Eliana La Ferrara, 2000. "Participation In Heterogeneous Communities," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 847-904, August.
  4. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
  5. Dahlberg, Matz & Edmark, Karin & Lundqvist, Heléne, 2011. "Ethnic Diversity and Preferences for Redistribution," Working Paper Series, Center for Fiscal Studies 2011:1, Uppsala University, Department of Economics.
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  7. Alesina, Alberto & Devleeschauwer, Arnaud & Wacziarg, Romain & Kurlat, Sergio & Easterly, William, 2003. "Fractionalization," Scholarly Articles 4553003, Harvard University Department of Economics.
  8. Erzo F.P. Luttmer, 1999. "Group Loyalty and the Taste for Redistribution," Working Papers 9902, Harris School of Public Policy Studies, University of Chicago.
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  12. Baqir, Reza & Easterly, William & Alesina, Alberto, 1999. "Public Goods and Ethnic Divisions," Scholarly Articles 4551797, Harvard University Department of Economics.
  13. Anne-Célia Disdier & Keith Head & Thierry Mayer, 2006. "Exposure to foreign media and changes in cultural traits: Evidence from naming patterns in France," Development Working Papers 213, Centro Studi Luca d\'Agliano, University of Milano.
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  16. Pierre-Philippe Combes & Bruno Decreuse & Benoît Schmutz & Alain Trannoy, 2012. "The Neighbor is King: Customer Discrimination in the Housing Market," Working Papers halshs-00793403, HAL.
  17. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  18. Fearon, James D. & Laitin, David D., 2000. "Violence and the Social Construction of Ethnic Identity," International Organization, Cambridge University Press, vol. 54(04), pages 845-877, September.
  19. Claude Taffin & Thierry Debrand, 2005. "Les facteurs structurels et conjoncturels de la mobilité résidentielle depuis 20 ans," Économie et Statistique, Programme National Persée, vol. 381(1), pages 125-146.
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Citations

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Cited by:
  1. Claire L. Adida & David D. Laitin & Marie-Anne Valfort, 2014. "Muslims in France: identifying a discriminatory equilibrium," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00977076, HAL.
  2. Adida, Claire L. & Laitin, David D. & Valfort, Marie-Anne, 2012. "Muslims in France: Identifying a Discriminatory Equilibrium," IZA Discussion Papers 6953, Institute for the Study of Labor (IZA).
  3. Matthew Collin, 2013. "Tribe or title? Ethnic enclaves and the demand for formal land tenure in a Tanzanian slum," CSAE Working Paper Series 2013-12, Centre for the Study of African Economies, University of Oxford.
  4. Xu, Guo, 2013. "Development through Empowerment: Delivering Effective Public Services – a Literature Review," ADB Economics Working Paper Series 382, Asian Development Bank.

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