IDEAS home Printed from https://ideas.repec.org/a/taf/recgxx/v93y2017i3p267-291.html
   My bibliography  Save this article

Urban Immigrant Diversity and Inclusive Institutions

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00130095.2017.1300056
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/00130095.2017.1300056?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Elena Bellini & Gianmarco I. P. Ottaviano & Dino Pinelli & Giovanni Prarolo, 2013. "Cultural Diversity and Economic Performance: Evidence from European Regions," Advances in Spatial Science, in: Riccardo Crescenzi & Marco Percoco (ed.), Geography, Institutions and Regional Economic Performance, edition 127, pages 121-141, Springer.
    2. Jessie Bakens & Peter Mulder & Peter Nijkamp, 2013. "Economic Impacts Of Cultural Diversity In The Netherlands: Productivity, Utility, And Sorting," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 8-36, February.
    3. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2016. "Birthplace diversity and economic prosperity," Journal of Economic Growth, Springer, vol. 21(2), pages 101-138, June.
    4. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    5. Pierre Philippe Combes & Gilles Duranton & Henry G. Overman, 2005. "Agglomeration and the adjustment of the spatial economy§," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 311-349, August.
    6. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-1278, December.
    7. Moretti, Enrico, 2004. "Estimating the social return to higher education: evidence from longitudinal and repeated cross-sectional data," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 175-212.
    8. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1203-1250.
    9. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    10. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
    11. Alesina, Alberto & Drazen, Allan, 1991. "Why Are Stabilizations Delayed?," American Economic Review, American Economic Association, vol. 81(5), pages 1170-1188, December.
    12. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    13. Hong, Lu & Page, Scott E., 2001. "Problem Solving by Heterogeneous Agents," Journal of Economic Theory, Elsevier, vol. 97(1), pages 123-163, March.
    14. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    15. Edward J. Malecki, 2012. "Regional Social Capital: Why it Matters," Regional Studies, Taylor & Francis Journals, vol. 46(8), pages 1023-1039, June.
    16. Trax, Michaela & Brunow, Stephan & Suedekum, Jens, 2015. "Cultural diversity and plant-level productivity," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 85-96.
    17. Kemeny, Thomas, 2013. "Immigrant diversity and economic development in cities: a critical review," LSE Research Online Documents on Economics 58458, London School of Economics and Political Science, LSE Library.
    18. Stephen Gibbons & Olmo Silva & Felix Weinhardt, 2013. "Everybody Needs Good Neighbours? Evidence from Students’ Outcomes in England," Economic Journal, Royal Economic Society, vol. 123, pages 831-874, September.
    19. Nathan, Max, 2011. "The long term impacts of migration in British cities: diversity, wages, employment and prices," LSE Research Online Documents on Economics 33577, London School of Economics and Political Science, LSE Library.
    20. Kevin Morgan, 2007. "The Learning Region: Institutions, Innovation and Regional Renewal," Chapters, in: Roel Rutten & Frans Boekema (ed.), The Learning Region, chapter 5, Edward Elgar Publishing.
    21. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 625-685, Elsevier.
    22. Gianmarco I.P. Ottaviano & Giovanni Peri, 2021. "The economic value of cultural diversity: evidence from US cities," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 7, pages 187-222, World Scientific Publishing Co. Pte. Ltd..
    23. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    24. Kevin Morgan, 2007. "The Learning Region: Institutions, Innovation and Regional Renewal," Regional Studies, Taylor & Francis Journals, vol. 41(sup1), pages 147-159.
    25. Jens Suedekum & Katja Wolf & Uwe Blien, 2014. "Cultural Diversity and Local Labour Markets," Regional Studies, Taylor & Francis Journals, vol. 48(1), pages 173-191, January.
    26. 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.
    27. Thomas Kemeny & Michael Storper, 2012. "The Sources Of Urban Development: Wages, Housing, And Amenity Gaps Across American Cities," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 85-108, February.
    28. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    29. 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.
    30. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    31. Montalvo, Jose G. & Reynal-Querol, Marta, 2005. "Ethnic diversity and economic development," Journal of Development Economics, Elsevier, vol. 76(2), pages 293-323, April.
    32. Paul Collier, 2000. "Ethnicity, Politics and Economic Performance," Economics and Politics, Wiley Blackwell, vol. 12(3), pages 225-245, November.
    33. Stolle, Dietlind & Hooghe, Marc, 2005. "Inaccurate, Exceptional, One-Sided or Irrelevant? The Debate about the Alleged Decline of Social Capital and Civic Engagement in Western Societies," British Journal of Political Science, Cambridge University Press, vol. 35(1), pages 149-167, January.
    34. Woolcock, Michael & Narayan, Deepa, 2000. "Social Capital: Implications for Development Theory, Research, and Policy," World Bank Research Observer, World Bank Group, vol. 15(2), pages 225-249, August.
    35. Max Nathan, 2011. "The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices," SERC Discussion Papers 0067, Spatial Economics Research Centre, LSE.
    36. Michael Storper & Allen J. Scott, 2009. "Rethinking human capital, creativity and urban growth," Journal of Economic Geography, Oxford University Press, vol. 9(2), pages 147-167, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Crown, Daniel & Faggian, Alessandra & Corcoran, Jonathan, 2020. "Foreign-Born graduates and innovation: Evidence from an Australian skilled visa program✰,✰✰,★,★★," Research Policy, Elsevier, vol. 49(9).
    2. 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.
    3. Andrés Rodríguez‐Pose, 2020. "Institutions and the fortunes of territories," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(3), pages 371-386, June.
    4. 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.
    5. 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.
    6. 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.
    7. 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).
    8. 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.
    9. Cooke, Abigail & Kemeny, Thomas, 2017. "Cities, immigrant diversity, and complex problem solving," Research Policy, Elsevier, vol. 46(6), pages 1175-1185.
    10. 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.
    11. David C. Maré & Jacques Poot, 2019. "Commuting to diversity," Working Papers 19_20, Motu Economic and Public Policy Research.
    12. Ozgen, Ceren, 2021. "The Economics of Diversity: Innovation, Productivity, and the Labour Market," IZA Discussion Papers 14344, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Spatial Economics Research Centre, LSE.
    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.
    5. Cooke, Abigail & Kemeny, Thomas, 2017. "Cities, immigrant diversity, and complex problem solving," Research Policy, Elsevier, vol. 46(6), pages 1175-1185.
    6. Chasapopoulos, Panagiotis, 2018. "The impact of international immigration and cultural diversity on economic performance, public attitudes and political outcomes in European regions," Other publications TiSEM d4a10f2a-c1a2-4edd-9887-2, Tilburg University, School of Economics and Management.
    7. Dirk Dohse & Robert Gold, 2013. "Measuring Cultural Diversity at a Regional Level. WWWforEurope Working Paper No. 10," WIFO Studies, WIFO, number 46857.
    8. Ozbugday, Fatih Cemil, 2019. "Kültür ve Ekonomik Başarı [Culture and Economic Success]," MPRA Paper 96734, University Library of Munich, Germany.
    9. Dr Max Nathan, 2013. "The wider economic impacts of high-skilled migrants: a survey of the literature," National Institute of Economic and Social Research (NIESR) Discussion Papers 413, National Institute of Economic and Social Research.
    10. Mª Ángeles Caraballo & Eva Mª Buitrago, 2019. "Ethnolinguistic Diversity and Education. A Successful Pairing," Sustainability, MDPI, Open Access Journal, vol. 11(23), pages 1-18, November.
    11. 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.
    12. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute of Labor Economics (IZA).
    13. Camille Hémet & Clément Malgouyres, 2018. "Diversity and Employment Prospects: Neighbors Matter!," Journal of Human Resources, University of Wisconsin Press, vol. 53(3), pages 825-858.
    14. Ozgen, Ceren, 2021. "The Economics of Diversity: Innovation, Productivity, and the Labour Market," IZA Discussion Papers 14344, Institute of Labor Economics (IZA).
    15. Gerring, John & Thacker, Strom C. & Lu, Yuan & Huang, Wei, 2015. "Does Diversity Impair Human Development? A Multi-Level Test of the Diversity Debit Hypothesis," World Development, Elsevier, vol. 66(C), pages 166-188.
    16. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2016. "Birthplace diversity and economic prosperity," Journal of Economic Growth, Springer, vol. 21(2), pages 101-138, June.
    17. Nijkamp, Peter & Poot, Jacques, 2015. "Cultural Diversity: A Matter of Measurement," IZA Discussion Papers 8782, Institute of Labor Economics (IZA).
    18. María Delgado Gómez-Flors & Maite Alguacil, 2018. "The Impact of Immigrant Diversity on Wages. The Spanish Experience," Sustainability, MDPI, Open Access Journal, vol. 10(9), pages 1-29, September.
    19. Jessie Bakens & Peter Nijkamp, 2013. "Immigrant Heterogeneity and Urban Development: A Conceptual Analysis," Advances in Spatial Science, in: Riccardo Crescenzi & Marco Percoco (ed.), Geography, Institutions and Regional Economic Performance, edition 127, pages 381-396, Springer.
    20. Brixy, Udo & Brunow, Stephan & D'Ambrosio, Anna, 2020. "The unlikely encounter: Is ethnic diversity in start-ups associated with innovation?," Research Policy, Elsevier, vol. 49(4).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:recgxx:v:93:y:2017:i:3:p:267-291. 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: . General contact details of provider: http://www.tandfonline.com/recg .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/recg .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.