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Ethnic diversity and well-being

Journal article
Authors Alpaslan Akay
A. Constant
C. Giulietti
M. Guzi
Published in Journal of Population Economics
Volume 30
Issue 1
Pages 265-306
ISSN 0933-1433
Publication year 2017
Published at Department of Economics
Pages 265-306
Language en
Keywords Ethnic diversity, Subjective well-being, Assimilation, Multiculturality, cultural-diversity, segregation, immigration, germany, impact, unemployment, innovation, migration, natives, cities, Demography, Business & Economics
Subject categories Economics and Business

Abstract

This paper investigates how ethnic diversity, measured by immigrants' nationalities, influences the well-being of the host country. Using panel data from Germany from 1998 to 2012, we find a positive effect of ethnic diversity on the well-being of German natives. Our finding is robust to alternative definitions of ethnic diversity and to the non-random selection of natives and immigrants into regions. The positive effect of ethnic diversity is stronger for immigrant groups that are culturally and economically closer to Germany. Consistent with this result, we document the existence of two mechanisms explaining the influence of ethnic diversity on well-being: productivity-as captured by immigrants' skills and assimilation-and social capital-particularly in relation to the creation of a multicultural environment.

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