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 European Regional Science Association in its series ERSA conference papers with number ersa11p187.
Date of creation: Sep 2011
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- Stephan Brunow & Uwe Blien, 2011. "Effects of cultural diversity on individual establishments," Norface Discussion Paper Series 2011006, Norface Research Programme on Migration, Department of Economics, University College London.
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