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Urban Immigrant Diversity and Inclusive Institutions

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  • Tom Kemeny
  • Abigail Cooke

Abstract

Recent studies identify a robust positive correlation between the productivity of urban workers and the presence of a diverse range of immigrants in their midst. Seeking to better understand this relationship, this article tests the hypothesis that the rewards from immigrant diversity will be higher in metropolitan areas that feature more inclusive social and economic institutions. Institutions ought to matter because they regulate transaction costs, which, in principle, determine whether or not diversity offers advantages or disadvantages. We exploit longitudinal linked employer–employee data for the United States to test this idea, and we triangulate across two measures that differently capture the inclusiveness of urban institutions. Findings offer support for the hypothesis. In cities with low levels of inclusive institutions, the benefits of diversity are modest and in some cases nonexistent; in cities with high levels of inclusive institutions, the benefits of immigrant diversity are positive, significant, and substantial. We also find that weakly inclusive institutions hurt natives considerably more than foreign-born workers. These results confirm the economic significance of immigrant diversity, while suggesting the importance of local social and economic institutions.

Suggested Citation

  • Tom Kemeny & Abigail Cooke, 2017. "Urban Immigrant Diversity and Inclusive Institutions," Economic Geography, Taylor & Francis Journals, vol. 93(3), pages 267-291, May.
  • Handle: RePEc:taf:recgxx:v:93:y:2017:i:3:p:267-291
    DOI: 10.1080/00130095.2017.1300056
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    2. Rodríguez-Pose, Andrés & Von Berlepsch, Viola, 2017. "Does population diversity matter for economic development in the very long-term? Historic migration, diversity and county wealt," CEPR Discussion Papers 12347, C.E.P.R. Discussion Papers.
    3. Roberto Antonietti & Ron Boschma, 2021. "Social capital, resilience, and regional diversification in Italy [Social capital, innovation and growth: evidence from Europe]," Industrial and Corporate Change, Oxford University Press, vol. 30(3), pages 762-777.
    4. Andrés Rodríguez‐Pose, 2020. "Institutions and the fortunes of territories," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 371-386, June.
    5. Simona Iammarino & Andrés Rodriguez-Pose & Michael Storper, 2019. "Regional inequality in Europe: evidence, theory and policy implications," Journal of Economic Geography, Oxford University Press, vol. 19(2), pages 273-298.
    6. Ferrucci, Edoardo & Lissoni, Francesco, 2019. "Foreign inventors in Europe and the United States: Diversity and Patent Quality," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    7. Rodríguez-Pose, Andrés & Von Berlepsch, Viola, 2019. "The missing ingredient: Distance. Internal migration and its long-term economic impact in the United States," CEPR Discussion Papers 13485, C.E.P.R. Discussion Papers.
    8. Andrés Rodríguez-Pose & Viola Berlepsch, 2019. "Does Population Diversity Matter for Economic Development in the Very Long Term? Historic Migration, Diversity and County Wealth in the US," European Journal of Population, Springer;European Association for Population Studies, vol. 35(5), pages 873-911, December.
    9. Laursen, Keld & Leten, Bart & Nguyen, Ngoc Han & Vancauteren, Mark, 2020. "Mounting corporate innovation performance: The effects of high-skilled migrant hires and integration capacity," Research Policy, Elsevier, vol. 49(9).
    10. 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.
    11. Roxana Guti'errez-Romero & Nayeli Salgado, 2022. "New trends in South-South migration: The economic impact of COVID-19 and immigration enforcement," Papers 2212.12797, arXiv.org.
    12. Cooke, Abigail & Kemeny, Thomas, 2017. "Cities, immigrant diversity, and complex problem solving," Research Policy, Elsevier, vol. 46(6), pages 1175-1185.
    13. 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.
    14. Roxana Gutierrez-Romero & Nayeli Salgado, 2022. "New trends in South-South migration: The economic impact of COVID-19 and immigration enforcement," Working Papers 108, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    15. David C. Maré & Jacques Poot, 2019. "Valuing cultural diversity of cities," Working Papers 19_05, Motu Economic and Public Policy Research.
    16. Ying Zhou & Sajid Anwar, 2022. "Immigrant Diversity, Institutional Quality, and GVC Position," Sustainability, MDPI, vol. 14(4), pages 1-19, February.
    17. Michael Storper, 2018. "Separate Worlds? Explaining the current wave of regional economic polarization," Journal of Economic Geography, Oxford University Press, vol. 18(2), pages 247-270.
    18. David C. Maré & Jacques Poot, 2019. "Commuting to diversity," Working Papers 19_20, Motu Economic and Public Policy Research.
    19. Annie Tubadji & Valentina Montalto, 2021. "Geographies of Flowers and Geographies of Flower Power," Sustainability, MDPI, vol. 13(24), pages 1-23, December.

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