Effects of cultural diversity on individual establishments
AbstractInternational immigration affects the degree of cultural diversity present in a labour force. This paper focuses on the consequences of immigration with respect to the level of cultural diversity by estimating employment functions for individual establishments. The theory behind the empirical analyses is based on a "turned around" New Economic Geography model. The data basis used is a linked employer - employee data set generated by a fusion of the IAB Establishment Panel with the Employment Statistics of Germany, which provides very detailed information about individual workers and establishments. In the empirical analyses it is shown that employment is lower when the degree of diversity is higher, regarding the revenue of an individual establishment as given. From this result it can be derived under the conditions of monopolistic competition (implying elastic product demand) that the establishment is able to occupy a relatively large part of the market. Finally this implies relatively high labour demand.
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Bibliographic InfoPaper provided by Norface Research Programme on Migration, Department of Economics, University College London in its series Norface Discussion Paper Series with number 2011006.
Date of creation: Apr 2011
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effects of immigration; cultural diversity; employment; productivity; firm level;
Other versions of this item:
- Stephan Brunow & Uwe Blien, 2011. "Effects of cultural diversity on individual establishments," ERSA conference papers ersa11p187, European Regional Science Association.
- NEP-ALL-2011-06-18 (All new papers)
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- Stephan Brunow & Peter Nijkamp, 2012.
"The Impact of a Culturally Diverse Workforce on Firms' Market Size: An Empirical Investigation on Germany,"
Tinbergen Institute Discussion Papers
12-082/3, Tinbergen Institute.
- Stephan Brunow & Peter Nijkamp, 2012. "The impact of a culturally diverse workforce on firms’ market size: An empirical investigation on Germany," Norface Discussion Paper Series 2012022, Norface Research Programme on Migration, Department of Economics, University College London.
- Ceren Ozgen & Thomas de Graff, 2013. "Sorting out the impact of cultural diversity on innovative firms. An empirical analysis of Dutch micro-data," Norface Discussion Paper Series 2013012, Norface Research Programme on Migration, Department of Economics, University College London.
- Dirk Dohse & Robert Gold, 2013. "Measuring Cultural Diversity at a Regional Level," WWWforEurope Working Papers series 10, WWWforEurope.
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