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Impact of cultural diversity on local labor markets. Evidence from Greece's “age of mass migration”

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  • Stelios Roupakias
  • Spiridoula Dimou

Abstract

This paper analyzes how the interaction of ethnicities and cultures impacts on productivity and employment on Greek local labor markets, within the 20‐year interval between 1991 and 2011. We compute two alternative proxies for cultural diversity, namely the fractionalization and the polarization index, using information on 118 countries of origin. We also account for the potential endogenous allocation of individuals across local labor markets by employing a “shift‐share” instrument, exploiting the fact that networks play an important role in the settlement patterns of recent migrants. Our identification strategy indicates that the contribution of diversity in terms of birthplace is positive, at least up to a certain point. This finding appears to be robust and not driven by the inclusion of further controls, outliers, spatial autocorrelation, and selection on unobservables. Interestingly, we find that ethnic heterogeneity helps employment and productivity by promoting sectoral diversity.

Suggested Citation

  • Stelios Roupakias & Spiridoula Dimou, 2020. "Impact of cultural diversity on local labor markets. Evidence from Greece's “age of mass migration”," Manchester School, University of Manchester, vol. 88(2), pages 282-304, March.
    • Handle: RePEc:bla:manchs:v:88:y:2020:i:2:p:282-304
    DOI: 10.1111/manc.12301
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    Cited by:

    1. Ceren Ozgen, 2021. "The economics of diversity: Innovation, productivity and the labour market," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1168-1216, September.
    2. Silje Haus-Reve & Abigail Cooke, 2019. "Do regional social capital and trust matter for immigrant diversity and wages?," Papers in Evolutionary Economic Geography (PEEG) 1932, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2019.
    3. David Boto‐García & Carlos Varela‐Quintana & Alvaro Muñiz, 2023. "Foreign players, team production, and technical efficiency: Evidence from European soccer," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1209-1241, October.

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