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Economic Impacts of Cultural Diversity in the Netherlands: Productivity, Utility, and Sorting

Author

Listed:
  • Jessie Bakens

    (VU University Amsterdam)

  • Peter Mulder

    (VU University Amsterdam)

  • Peter Nijkamp

    (VU University Amsterdam)

Abstract

This discussion paper resulted in an article in the Journal of Regional Science (2013). Volume 53, issue 1, pages 8-36. This paper identifies the role of cultural diversity in explaining spatial disparities in wages and housing prices across Dutch cities, using unique individual panel data of home owners. We distinguish between the effects of interactions-based productivity, consumption amenities and sorting of heterogeneous home owners while controlling for interactions between the labor and housing market. We find that an increase in the cultural diversity of the population positively impacts equilibrium wages and housing prices, particularly in the largest and most densely populated cities. This result is largely driven by spatial sorting of individuals in both the labor and housing market. After controlling for home owner heterogeneity we find that increasing cultural diversity no longer impacts local labor markets and negatively impacts local housing markets. The latter result is likely to be driven by a negative causal effect of increased cultural diversity on neighb orhood quality that outweighs a positive effect of increased cultural diversity in consumption goods.

Suggested Citation

  • Jessie Bakens & Peter Mulder & Peter Nijkamp, 2012. "Economic Impacts of Cultural Diversity in the Netherlands: Productivity, Utility, and Sorting," Tinbergen Institute Discussion Papers 12-024/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20120024
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    Citations

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    Cited by:

    1. 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.
    2. 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).
    3. repec:taf:recgxx:v:93:y:2017:i:3:p:267-291 is not listed on IDEAS
    4. Tom Kemeny & Abigail Cooke, 2017. "Urban Immigrant Diversity and Inclusive Institutions," Economic Geography, Taylor & Francis Journals, vol. 93(3), pages 267-291, May.
    5. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2013. "The impact of cultural diversity on firm innovation: evidence from Dutch micro-data," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-24, December.
    6. repec:eee:respol:v:46:y:2017:i:6:p:1175-1185 is not listed on IDEAS
    7. Bayar, Mehmet, 2016. "The impact of cultural diversity on the German housing market," Ruhr Economic Papers 662, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. 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.
    9. Neil Lee, 2013. "Cultural Diversity, Cities and Innovation: firm Effects or City Effects?," SERC Discussion Papers 0144, Spatial Economics Research Centre, LSE.
    10. repec:bla:jregsc:v:58:y:2018:i:4:p:728-758 is not listed on IDEAS
    11. Zhiling Wang & Thomas de Graaff & Peter Nijkamp, 2014. "The choice of migration destinations: cultural diversity versus cultural distance," ERSA conference papers ersa14p1147, European Regional Science Association.
    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. David C. Maré & Jacques Poot, 2019. "Valuing cultural diversity of cities," Working Papers 19_05, Motu Economic and Public Policy Research.
    14. Zhiling Wang & Thomas De Graaff & Peter Nijkamp, 2016. "Cultural Diversity and Cultural Distance as Choice Determinants of Migration Destination," Spatial Economic Analysis, Taylor & Francis Journals, vol. 11(2), pages 176-200, June.
    15. Montalvo, Jose G & Reynal-Querol, Marta, 2017. "Ethnic Diversity and Growth: Revisiting the Evidence," CEPR Discussion Papers 12400, C.E.P.R. Discussion Papers.
    16. Simonetta Longhi, 2014. "Cultural diversity and subjective well-being," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-19, December.
    17. José Garcia Montalvo & Marta Reynal-Querol, 2017. "Ethnic diversity and growth: revisiting the evidence," Economics Working Papers 1585, Department of Economics and Business, Universitat Pompeu Fabra.
    18. Jessie Bakens & Raymond Florax & Henri (H.L.F.) de Groot & Peter Mulder, 2018. "Living Apart Together: The Economic Value of Ethnic Diversity in Cities," Tinbergen Institute Discussion Papers 18-029/VIII, Tinbergen Institute.
    19. repec:ire:issued:v:21:n:04:2018:p:549-566 is not listed on IDEAS
    20. 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.
    21. Abigail Cooke & Thomas Kemeny, 2016. "Immigrant Diversity and Complex Problem Solving," Working Papers 16-04, Center for Economic Studies, U.S. Census Bureau.
    22. Accetturo, Antonio & Manaresi, Francesco & Mocetti, Sauro & Olivieri, Elisabetta, 2014. "Don't stand so close to me: The urban impact of immigration," Regional Science and Urban Economics, Elsevier, vol. 45(C), pages 45-56.
    23. Gianmarco Ottaviano & Giovanni Peri, 2013. "New Frontiers Of Immigration Research: Cities And Firms," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 1-7, February.
    24. repec:gam:jsusta:v:10:y:2018:i:9:p:3312-:d:170226 is not listed on IDEAS

    More about this item

    Keywords

    cultural diversity; immigrants; local amenities; sorting; housing prices; productivity;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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