IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article

Impact of cultural diversity on wages, evidence from panel data

  • Longhi, Simonetta

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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0166046213000604
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 43 (2013)
Issue (Month): 5 ()
Pages: 797-807

as
in new window

Handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:797-807
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Elena Fumagalli & Laura Fumagalli, 2009. "Like Oil and Water or Chocolate and Peanut Butter? Ethnic Diversity and Social Participation of Young People in England," Working Papers 2009.94, Fondazione Eni Enrico Mattei.
  2. Annekatrin Niebuhr, 2010. "Migration and innovation: Does cultural diversity matter for regional R&D activity?," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 563-585, 08.
  3. Ottaviano, Gianmarco I.P. & Peri, Giovanni, 2005. "Cities and cultures," Journal of Urban Economics, Elsevier, vol. 58(2), pages 304-337, September.
  4. Lucie Schmidt & Paul N. Courant, 2003. "Sometimes Close is Good Enough: The Value of Nearby Environmental Amenities," Department of Economics Working Papers 2003-07, Department of Economics, Williams College.
  5. Simonetta Longhi & Malcolm Brynin, 2009. "Occupational Change in Britain and Germany," SOEPpapers on Multidisciplinary Panel Data Research 204, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Alberto Alesina & Arnaud Devleeschauwer & William Easterly & Sergio Kurlat & Romain Wacziarg, 2003. "Fractionalization," NBER Working Papers 9411, National Bureau of Economic Research, Inc.
  7. Trax, Michaela & Brunow, Stephan & Suedekum, Jens, 2012. "Cultural Diversity and Plant‐Level Productivity," IZA Discussion Papers 6845, Institute for the Study of Labor (IZA).
  8. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "The economic value of cultural diversity: evidence from US cities," Journal of Economic Geography, Oxford University Press, vol. 6(1), pages 9-44, January.
  9. Giovanni Peri, 2012. "The Effect Of Immigration On Productivity: Evidence From U.S. States," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 348-358, February.
  10. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2013. "Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch firms," Norface Discussion Paper Series 2013003, Norface Research Programme on Migration, Department of Economics, University College London.
  11. David Card, 2005. "Is the New Immigration Really So Bad?," NBER Working Papers 11547, National Bureau of Economic Research, Inc.
  12. Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government.
  13. Max Nathan & Neil Lee, 2013. "Cultural Diversity, Innovation, and Entrepreneurship: Firm-level Evidence from London," Economic Geography, Clark University, vol. 89(4), pages 367-394, October.
  14. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  15. Natalia Letki, 2008. "Does Diversity Erode Social Cohesion? Social Capital and Race in British Neighbourhoods," Political Studies, Political Studies Association, vol. 56, pages 99-126, 03.
  16. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2012. "Does Labor Diversity Affect Firm Productivity?," IZA Discussion Papers 6973, Institute for the Study of Labor (IZA).
  17. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent & Roux, Sébastien, 2012. "Sorting and local wage and skill distributions in France," CEPR Discussion Papers 8920, C.E.P.R. Discussion Papers.
  18. Alesina, Alberto F & La Ferrara, Eliana, 2000. "Who Trusts Others?," CEPR Discussion Papers 2646, C.E.P.R. Discussion Papers.
  19. Hoogendoorn, Sander M. & van Praag, Mirjam C., 2012. "Ethnic Diversity and Team Performance: A Field Experiment," IZA Discussion Papers 6731, Institute for the Study of Labor (IZA).
  20. Alberto Alesina & Eliana La Ferrara, 1999. "Participation in Heterogeneous Communities," NBER Working Papers 7155, National Bureau of Economic Research, Inc.
  21. Günter K Stahl & Martha L Maznevski & Andreas Voigt & Karsten Jonsen, 2010. "Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups," Journal of International Business Studies, Palgrave Macmillan, vol. 41(4), pages 690-709, May.
  22. S. Longhi & P. Nijkamp & J. Poot, 2010. "Joint impacts of immigration on wages and employment: review and meta-analysis," Journal of Geographical Systems, Springer, vol. 12(4), pages 355-387, December.
  23. Simonetta Longhi & Cheti Nicoletti & Lucinda Platt, 2013. "Explained and unexplained wage gaps across the main ethno-religious groups in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 471-493, April.
  24. Dustmann, Christian & Preston, Ian, 2001. "Attitudes to Ethic Minorities, Ethnic Context and Location Decisions," Economic Journal, Royal Economic Society, vol. 111(470), pages 353-73, April.
  25. Ozgen, Ceren & Nijkamp, Peter & Poot, Jacques, 2011. "The Impact of Cultural Diversity on Innovation: Evidence from Dutch Firm-Level Data," IZA Discussion Papers 6000, Institute for the Study of Labor (IZA).
  26. Jessie Bakens & Peter Mulder & Peter Nijkamp, 2012. "Economic Impacts of Cultural Diversity in the Netherlands: Productivity, Utility, and Sorting," Tinbergen Institute Discussion Papers 12-024/3, Tinbergen Institute.
  27. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
  28. Dora L. Costa & Matthew E. Kahn, 2003. "Understanding the American Decline in Social Capital, 1952--1998," Kyklos, Wiley Blackwell, vol. 56(1), pages 17-46, February.
  29. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  30. Raquel Carrasco & Juan Jimeno & A. Ortega, 2008. "The effect of immigration on the labor market performance of native-born workers: some evidence for Spain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(3), pages 627-648, July.
  31. Christian Dustmann & Tim Hatton & Ian Preston, 2005. "The Labour Market Effects of Immigration," Economic Journal, Royal Economic Society, vol. 115(507), pages F297-F299, November.
  32. E. Paul Durrenberger, 2005. "Labour," Chapters, in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar Publishing.
  33. Alberto Alesina & Eliana La Ferrara, 2000. "Participation in Heterogeneous Communities," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 847-904.
  34. Max Nathan, 2011. "The Economics of Super-Diversity: Findings from British Cities, 2001-2006," SERC Discussion Papers 0068, Spatial Economics Research Centre, LSE.
  35. Christian Dustmann & Francesca Fabbri & Ian Preston, 2005. "The Impact of Immigration on the British Labour Market," Economic Journal, Royal Economic Society, vol. 115(507), pages F324-F341, November.
  36. Ceren Ozgen, 2011. "The Impact of Cultural Diversity on Innovation: Evidence from Dutch Firm-Level Data," Norface Discussion Paper Series 2011013, Norface Research Programme on Migration, Department of Economics, University College London.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:43:y:2013:i:5:p:797-807. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.