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Is diversity bad for economic growth?: Evidence from state-level data in the US

  • Ratna, Nazmun N.
  • Quentin Grafton, R.
  • Kompas, Tom

The paper examines the macroeconomic effects of social diversity in the United States. Employing a cross-sectional dataset for 48 states, we find mixed empirical evidence for the impact of diversity on Gross State Product (GSP) per capita growth: racial diversity reduces GSP growth, while linguistic diversity raises GSP growth. Our findings suggest that because English is used frequently by non-native speakers barriers to communications based on race are more pronounced and enduring than those based on linguistic differences. The results provide a justification for establishing 'weak ties' across diverse racial groups as a means to enhance economic performance.

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Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 38 (2009)
Issue (Month): 6 (December)
Pages: 859-870

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Handle: RePEc:eee:soceco:v:38:y:2009:i:6:p:859-870
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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