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Cities and Cultures

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  • Gianmarco I.P. Ottaviano

    (Università di Bologna, Fondazione Eni Enrico Mattei and CEPR)

  • Giovanni Peri

    (UC Davis and CESifo)

Abstract

We investigate the existence of wage premium due to cultural diversity across US cities. Using census data from 1970 to 1990, we find that at the urban level richer diversity is systematically associated with higher average nominal wages for white US-born males. We measure cultural diversity in a city using the variety of languages spoken by city-residents. While the positive correlation between wages and diversity survives a battery of robustness checks, it seems to be larger once foreign cultures have been assimilated. Finally, instrumental variable estimation hints at causation going from diversity to wages. Comparing real and nominal wages across cities, we interpret these results as evidence that diversity enhances productivity.

Suggested Citation

  • Gianmarco I.P. Ottaviano & Giovanni Peri, 2004. "Cities and Cultures," Working Papers 2004.92, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2004.92
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    References listed on IDEAS

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    More about this item

    Keywords

    Cultural diversity; Productivity; Wages; Metropolitan areas;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • F1 - International Economics - - Trade

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