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‘United in Diversity’---Does Social Diversity Increase Subjective?

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  • Matthias Opfinger
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    Abstract

    The European Union emphasizes the advantages arising from diversity. However, economic studies prove that diversity can lead to detrimental outcomes, ultimately resulting in lower well-being. This paper assesses the direct link between well-being and diversity within a society, in terms of ethnicity, language, and religion. I find that ethnic diversity is linearly and positively related to happiness and life satisfaction. The other dimensions of social diversity and well-being are related in a U-shape. At low levels of diversity an increase reduces well-being. The relationship becomes positive only if diversity is sufficiently high. I argue that a threat to the dominant position of one group prevents the formation of a common identity. If diversity is sufficiently high, the groups have to establish contact which reduces prejudices and helps to form a common identity.

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    File URL: http://www.uni-trier.de/fileadmin/fb4/prof/VWL/EWF/Research_Papers/2014-10.pdf
    File Function: First version, 2014
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    Bibliographic Info

    Paper provided by University of Trier, Department of Economics in its series Research Papers in Economics with number 2014-10.

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    Length: 20 pages
    Date of creation: 2014
    Date of revision:
    Handle: RePEc:trr:wpaper:201410

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    Related research

    Keywords: Social Diversity; Common Identity; Group Threat; Tolerant Societies;

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    References

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    1. Robert J. Barro & Rachel M. McCleary, 2002. "Religion and Political Economy in an International Panel," NBER Working Papers 8931, National Bureau of Economic Research, Inc.
    2. 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.
    3. Erich Gundlach & Matthias Opfinger, 2011. "Religiosity as a determinant of happiness," GIGA Working Paper Series 163, GIGA German Institute of Global and Area Studies.
    4. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
    5. repec:pri:cheawb:deaton_income_health_and_wellbeing_around_the_world_evidence_%20from_gallup_world_poll_jep_spring2008 is not listed on IDEAS
    6. repec:taf:regstd:v:46:y:2012:i:3:p:253-271 is not listed on IDEAS
    7. Sacks, Daniel W. & Stevenson, Betsey & Wolfers, Justin, 2010. "Subjective Well-Being, Income, Economic Development and Growth," CEPR Discussion Papers 8048, C.E.P.R. Discussion Papers.
    8. Angus Deaton, 2008. "Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 53-72, Spring.
    9. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, vol. 76(2), pages 293-323, April.
    10. Matthias Opfinger, 2013. "Two Sides of a Medal: The Changing Relationship between Religious Diversity and Religiosity," Research Papers in Economics 2013-06, University of Trier, Department of Economics.
    11. Mookerjee, Rajen & Beron, Krista, 2005. "Gender, religion and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 34(5), pages 674-685, October.
    12. repec:pri:cheawb:deaton_income_health_and_wellbeing_around_the_world_evidence_%20from_gall is not listed on IDEAS
    13. Abbott Ferriss, 2002. "Religion and the Quality of Life," Journal of Happiness Studies, Springer, vol. 3(3), pages 199-215, September.
    14. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
    15. Easterlin, Richard A., 1995. "Will raising the incomes of all increase the happiness of all?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(1), pages 35-47, June.
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