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Is Tolerance Good or Bad for Growth?

  • Berggren, Niclas

    ()

    (The Ratio Institute)

  • Elinder, Mikael

    ()

    (Research Institute of Industrial Economics (IFN))

We investigate to what extent tolerance, as measured by attitudes toward different types of neighbors, affects economic growth. Data from the World Values Survey enable us to investigate tolerance–growth relationships for 54 countries. We provide estimates based on cross-sectional as well as panel-data regressions. In addition we test for robustness with respect to model specification and sample composition. Unlike previous studies, by Richard Florida and others, we find that tolerance toward homosexuals is negatively related to growth. For tolerance toward people of a different race, we do not find robust results, but the sign of the estimated coefficients is positive, suggesting that inclusion of people irrespective of race makes good use of productive capacity. We propose mechanisms to explain these divergent findings, which clarify why different kinds of tolerance may be of different economic importance.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 846.

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Length: 34 pages
Date of creation: 16 Aug 2010
Date of revision:
Publication status: Published as Berggren, Niclas and Mikael Elinder, 'Is Tolerance Good or Bad for Growth?' in Public Choice, 2012, pages 283-308.
Handle: RePEc:hhs:iuiwop:0846
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