Cultural Diversity is a Driver for Economic Vitality

July 5, 2010 at 7:23 am Leave a comment

During the Project Concentrus planning process, we have talked about the importance of cultural diversity. Here is a study that documents its importance to economic vitality.

From the Journal of Economic Geography: “What are the economic consequences to U.S. natives of the growing diversity of American cities? Is their productivity or utility affected by cultural diversity as measured by diversity of countries of birth of U.S. residents? We document in this paper a very robust correlation: US-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990, experienced a significant increase in their wage and in the rental price of their housing. Such finding is economically significant and survives omitted vari- able bias and endogeneity bias. As people and firms are mobile across cities in the long run we argue that, in equilibrium, these correlations are consistent with a net positive effect of cultural diversity on the productivity of natives.”

Read the whole article here.

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Entry filed under: Cultural Diversity. Tags: , , .

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