Diversity and Cooperation

Dan Anderberg, Gordon Dahl, Christina Felfe, Helmut Rainer and Thomas Siedler

No 10965, CESifo Working Paper Series from CESifo

Abstract: What makes diversity unifying in some settings but divisive in others? We examine how the mixing of ethnic groups in German schools affects intergroup cooperation and trust. We leverage the quasi-random assignment of students to classrooms within schools to obtain variation in the type of diversity that prevails in a peer group. We combine this with a large-scale, incentivized lab-in-field experiment based on the investment game, allowing us to assess the in-group bias of native German students in interactions with other natives (in-group) versus immigrants (out-group). We find in-group bias peaks in culturally polarized classrooms, where the native and immigrant groups are both large, but have different religious backgrounds. In contrast, in classrooms characterized by non-cultural polarization, fractionalization, or a native supermajority, there are significantly lower levels of own-group favoritism. Exploring mechanisms, we find that in culturally polarized classrooms, natives are less likely to form friendships with immigrants, have less of a shared identity, and experience less favorable treatment from immigrants than from fellow natives. These classroom experiences foster negative stereotypes, reducing trust and diminishing other-regarding preferences toward immigrants outside the classroom. Our findings suggest that extra efforts are needed to counteract low levels of inclusivity and trust in culturally polarized environments.

Keywords: in-group bias; diversity; cultural polarization (search for similar items in EconPapers)
JEL-codes: J15 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-exp, nep-soc and nep-ure
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