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Impact of cultural diversity on wages, evidence from panel data

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  • Longhi, Simonetta

Abstract

This paper combines individual data from the British Household Panel Survey and yearly population estimates for England to analyse the impact that cultural diversity has on individual wages. Do people living in more diverse areas earn higher wages after controlling for other observable and unobservable characteristics? The results show that cultural diversity is positively associated with wages, but only when cross-section data are used, while panel data estimations show no impact of diversity. Since natives with comparatively higher skills – and wages – tend to self-select into more diverse areas, cross-section analyses may produce upwardly biassed results.

Suggested Citation

  • Longhi, Simonetta, 2013. "Impact of cultural diversity on wages, evidence from panel data," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 797-807.
  • Handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:797-807
    DOI: 10.1016/j.regsciurbeco.2013.07.004
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    Citations

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    Cited by:

    1. Abigail Cooke & Thomas Kemeny, 2016. "Urban Immigrant Diversity and Inclusive Institutions," Working Papers 16-07, Center for Economic Studies, U.S. Census Bureau.
    2. repec:eee:respol:v:46:y:2017:i:6:p:1175-1185 is not listed on IDEAS
    3. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    4. Abigail Cooke & Thomas Kemeny, 2016. "Immigrant Diversity and Complex Problem Solving," Working Papers 16-04, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    Cultural diversity; Wages; Panel data;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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