IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp9726.html
   My bibliography  Save this paper

Ethnic Diversity and Well-Being

Author

Listed:
  • Akay, Alpaslan

    (University of Gothenburg)

  • Constant, Amelie F.

    (Temple University)

  • Giulietti, Corrado

    (University of Southampton)

  • Guzi, Martin

    (Masaryk University)

Abstract

This paper investigates how ethnic diversity, measured by the immigrants' countries of origin, influences the well-being of the host country. Using panel data from Germany for the period 1998 to 2012, we find a positive effect of ethnic diversity on the well-being of German citizens. To corroborate the robustness of our results, we estimate several alternative specifications and investigate possible causality issues, including non-random selection of natives and immigrants into regions. Finally, we explore productivity and social capital as potential mechanisms behind our finding.

Suggested Citation

  • Akay, Alpaslan & Constant, Amelie F. & Giulietti, Corrado & Guzi, Martin, 2016. "Ethnic Diversity and Well-Being," IZA Discussion Papers 9726, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp9726
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp9726.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2016. "Birthplace diversity and economic prosperity," Journal of Economic Growth, Springer, vol. 21(2), pages 101-138, June.
    2. Gregori Baetschmann & Kevin E. Staub & Rainer Winkelmann, 2015. "Consistent estimation of the fixed effects ordered logit model," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(3), pages 685-703, June.
    3. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-659, May.
    4. Glitz, Albrecht, 2014. "Ethnic segregation in Germany," Labour Economics, Elsevier, vol. 29(C), pages 28-40.
    5. Enrico Spolaore & Romain Wacziarg, 2009. "The Diffusion of Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 469-529.
    6. Blanchflower, David G. & Oswald, Andrew J., 2008. "Is well-being U-shaped over the life cycle?," Social Science & Medicine, Elsevier, vol. 66(8), pages 1733-1749, April.
    7. John F. Helliwell & Christopher P. Barrington-Leigh & Anthony Harris & Haifang Huang, 2009. "International Evidence on the Social Context of Well-Being," NBER Working Papers 14720, National Bureau of Economic Research, Inc.
    8. Gundi Knies & C. Katharina Spieß, 2007. "Regional Data in the German Socio-Economic Panel Study (SOEP)," Data Documentation 17, DIW Berlin, German Institute for Economic Research.
    9. Stephan Brunow & Peter Nijkamp, 2012. "The Impact of a Culturally Diverse Workforce on Firms' Market Size: An Empirical Investigation on Germany," Tinbergen Institute Discussion Papers 12-082/3, Tinbergen Institute.
    10. Ernst Fehr & Urs Fischbacher & Bernhard von Rosenbladt & J�rgen Schupp & Gert G. Wagner, "undated". "A Nation-Wide Laboratory: Examining trust and trustworthiness by integrating behavioral experiments into representative surveys," IEW - Working Papers 141, Institute for Empirical Research in Economics - University of Zurich.
    11. Cobb-Clark, Deborah A. & Schurer, Stefanie, 2012. "The stability of big-five personality traits," Economics Letters, Elsevier, vol. 115(1), pages 11-15.
    12. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    13. Timothy J. Hatton & Massimiliano Tani, 2005. "Immigration and Inter-Regional Mobility in the UK, 1982-2000," Economic Journal, Royal Economic Society, vol. 115(507), pages 342-358, November.
    14. Amelie Constant & Douglas S. Massey, 2003. "Self-selection, earnings, and out-migration: A longitudinal study of immigrants to Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(4), pages 631-653, November.
    15. Akay, Alpaslan & Martinsson, Peter, 2012. "Positional Concerns through the Life Cycle: Evidence from Subjective Well-Being Data and Survey Experiments," IZA Discussion Papers 6342, Institute of Labor Economics (IZA).
    16. 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..
    17. Francesco D’Amuri & Gianmarco I.P. Ottaviano & Giovanni Peri, 2021. "The labor market impact of immigration in Western Germany in the 1990s," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 8, pages 223-243, World Scientific Publishing Co. Pte. Ltd..
    18. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
    19. Per-Anders Edin & Peter Fredriksson & Olof Åslund, 2003. "Ethnic Enclaves and the Economic Success of Immigrants—Evidence from a Natural Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 329-357.
    20. David A. Jaeger & Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Holger Bonin, 2010. "Direct Evidence on Risk Attitudes and Migration," The Review of Economics and Statistics, MIT Press, vol. 92(3), pages 684-689, August.
    21. Joshua D. Angrist & Adriana D. Kugler, 2003. "Protective or counter-productive? labour market institutions and the effect of immigration on eu natives," Economic Journal, Royal Economic Society, vol. 113(488), pages 302-331, June.
    22. Timo Hener & Helmut Rainer & Thomas Siedler, 2016. "Political socialization in flux?: linking family non-intactness during childhood to adult civic engagement," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 633-656, June.
    23. Constant, Amelie F. & Gataullina, Liliya & Zimmermann, Klaus F., 2009. "Ethnosizing immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 274-287, March.
    24. Rainer Winkelmann, 2009. "Unemployment, Social Capital, and Subjective Well-Being," Journal of Happiness Studies, Springer, vol. 10(4), pages 421-430, August.
    25. Enrico Spolaore & Romain Wacziarg, 2018. "Ancestry and development: New evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 33(5), pages 748-762, August.
    26. Akay, Alpaslan & Martinsson, Peter, 2009. "Sundays Are Blue: Aren’t They? - The Day-of-the-Week Effect on Subjective Well-Being and Socio-Economic Status," Working Papers in Economics 397, University of Gothenburg, Department of Economics.
    27. Gianmarco I.P. Ottaviano & Giovanni Peri, 2021. "Cities and cultures," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 6, pages 153-186, World Scientific Publishing Co. Pte. Ltd..
    28. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
    29. Alpaslan Akay & Olivier Bargain & Klaus F. Zimmermann, 2017. "Home Sweet Home?: Macroeconomic Conditions in Home Countries and the Well-Being of Migrants," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 351-373.
    30. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    31. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May.
    32. Marco Manacorda & Alan Manning & Jonathan Wadsworth, 2012. "The Impact Of Immigration On The Structure Of Wages: Theory And Evidence From Britain," Journal of the European Economic Association, European Economic Association, vol. 10(1), pages 120-151, February.
    33. 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.
    34. Sturgis, Patrick & Brunton-Smith, Ian & Read, Sanna & Allum, Nick, 2011. "Does Ethnic Diversity Erode Trust? Putnam’s ‘Hunkering Down’ Thesis Reconsidered," British Journal of Political Science, Cambridge University Press, vol. 41(1), pages 57-82, January.
    35. Amelie F. Constant & Klaus F. Zimmermann, 2008. "Measuring Ethnic Identity and its Impact on Economic Behavior," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 424-433, 04-05.
    36. Akay, Alpaslan & Constant, Amelie & Giulietti, Corrado, 2014. "The impact of immigration on the well-being of natives," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 72-92.
    37. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    38. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
    39. Andrew McCulloch, 2007. "The Changing Structure of Ethnic Diversity and Segregation in England, 1991–2001," Environment and Planning A, , vol. 39(4), pages 909-927, April.
    40. Paul Frijters & John P. Haisken-DeNew & Michael A. Shields, 2004. "Investigating the Patterns and Determinants of Life Satisfaction in Germany Following Reunification," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
    41. Daniel Kahneman & Robert Sugden, 2005. "Experienced Utility as a Standard of Policy Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(1), pages 161-181, September.
    42. Alpaslan Akay & Gökhan Karabulut & Peter Martinsson, 2013. "The effect of religiosity and religious festivals on positional concerns -- an experimental investigation of Ramadan," Applied Economics, Taylor & Francis Journals, vol. 45(27), pages 3914-3921, September.
    43. Carol Graham & Julia Ruiz Pozuelo, 2017. "Happiness, stress, and age: how the U curve varies across people and places," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 225-264, January.
    44. repec:ces:ifodic:v:12:y:2014:i:2:p:19116211 is not listed on IDEAS
    45. Stephan Brunow & Uwe Blien, 2014. "Effects of cultural diversity on individual establishments," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(1/2), pages 166-186, May.
    46. Timo Hener & Helmut Rainer & Thomas Siedler, 2016. "Political socialization in flux?: linking family non-intactness during childhood to adult civic engagement," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 633-656, June.
    47. Uwe Blien & Linda Borrs & Jens Südekum & Katja Wolf, 2014. "Local Labour Markets and Cultural Diversity," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(02), pages 27-34, July.
    48. Liliana Winkelmann & Rainer Winkelmann, 1998. "Why Are the Unemployed So Unhappy?Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
    49. 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.
    50. Uwe Blien & Linda Borrs & Jens Südekum & Katja Wolf, 2014. "Local Labour Markets and Cultural Diversity," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(2), pages 27-34, 07.
    Full references (including those not matched with items on IDEAS)

    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. Akay, Alpaslan & Constant, Amelie & Giulietti, Corrado, 2014. "The impact of immigration on the well-being of natives," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 72-92.
    2. Alpaslan Akay & Olivier Bargain & Klaus F. Zimmermann, 2017. "Home Sweet Home?: Macroeconomic Conditions in Home Countries and the Well-Being of Migrants," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 351-373.
    3. Dirk Dohse & Robert Gold, 2013. "Measuring Cultural Diversity at a Regional Level. WWWforEurope Working Paper No. 10," WIFO Studies, WIFO, number 46857, March.
    4. Ozbugday, Fatih Cemil, 2019. "Kültür ve Ekonomik Başarı [Culture and Economic Success]," MPRA Paper 96734, University Library of Munich, Germany.
    5. Nijkamp, Peter & Poot, Jacques, 2015. "Cultural Diversity: A Matter of Measurement," IZA Discussion Papers 8782, Institute of Labor Economics (IZA).
    6. Akay, Alpaslan & Bargain, Olivier B. & Giulietti, Corrado & Robalino, Juan D. & Zimmermann, Klaus F., 2016. "Remittances and relative concerns in rural China," China Economic Review, Elsevier, vol. 37(C), pages 191-207.
    7. Dirk Dohse & Robert Gold, 2014. "Cultural Diversity and Economic Policy. WWWforEurope Working Paper No. 64," WIFO Studies, WIFO, number 47494, March.
    8. Frédéric Docquier & Riccardo Turati & Jérôme Valette & Chrysovalantis Vasilakis, 2020. "Birthplace diversity and economic growth: evidence from the US states in the Post-World War II period [Cultural diversity and economic growth: evidence from the US during the age of mass migration]," Journal of Economic Geography, Oxford University Press, vol. 20(2), pages 321-354.
    9. 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.
    10. Zhiling Wang & Thomas de Graaff & Peter Nijkamp, 2018. "Barriers of Culture, Networks, and Language in International Migration: A Review," REGION, European Regional Science Association, vol. 5, pages 73-89.
    11. Steffen Otterbach & Alfonso Sousa-Poza, 2016. "Job insecurity, employability and health: an analysis for Germany across generations," Applied Economics, Taylor & Francis Journals, vol. 48(14), pages 1303-1316, March.
    12. Akay, Alpaslan & Bargain, Olivier & Zimmermann, Klaus F., 2012. "Relative concerns of rural-to-urban migrants in China," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 421-441.
    13. Merton, Robert C, 1978. "On the Cost of Deposit Insurance When There Are Surveillance Costs," The Journal of Business, University of Chicago Press, vol. 51(3), pages 439-452, July.
    14. 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.
    15. Leonardo Becchetti & Alessandra Pelloni, 2013. "What are we learning from the life satisfaction literature?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(2), pages 113-155, June.
    16. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Centre for Economic Performance, LSE.
    17. Tom Kemeny & Abigail Cooke, 2017. "Urban Immigrant Diversity and Inclusive Institutions," Economic Geography, Taylor & Francis Journals, vol. 93(3), pages 267-291, May.
    18. Frédéric Docquier & Riccardo Turati & Jérôme Valette & Chrysovalantis Vasilakis, 2016. "Multiculturalism and Growth: Skill-Specific Evidence from the Post-World War II Period," LIDAM Discussion Papers IRES 2016028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    19. Leonardo Becchetti & Elena Giachin Ricca & Alessandra Pelloni, 2009. "The 60s Turnaround as a Test on the Causal Relationship between Sociability and Happiness," SOEPpapers on Multidisciplinary Panel Data Research 209, DIW Berlin, The German Socio-Economic Panel (SOEP).
    20. Stephan Brunow & Bastian Stockinger, 2013. "Establishments' and Regions' Cultural Diversity as a Source of Innovation: Evidence from Germany," Norface Discussion Paper Series 2013022, Norface Research Programme on Migration, Department of Economics, University College London.

    More about this item

    Keywords

    assimilation; multiculturality; subjective well-being; ethnic diversity;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:iza:izadps:dp9726. See general information about how to correct material in RePEc.

    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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.