Effects of cultural diversity on individual establishments

Stephan Brunow and Uwe Blien ()

ERSA conference papers from European Regional Science Association

Abstract: International immigration affects the degree of cultural diversity present in a labour force. This paper focuses on the consequences of immigration with respect to the level of cultural diversity by estimating employment functions for individual establishments. The theory behind the empirical analyses is based on a 'turned around' New Economic Geography model. The data basis used is a linked employer -- employee data set generated by a fusion of the IAB Establishment Panel with the Employment Statistics of Germany, which provides very detailed information about individual workers and establishments. In the empirical analyses it is shown that employment is lower when the degree of diversity is higher, regarding the revenue of an individual establishment as given. From this result it can be derived under the conditions of monopolistic competition (implying elastic product demand) that the establishment is able to occupy a relatively large part of the market. Finally this implies relatively high labour demand.

Date: 2011-09
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Effects of cultural diversity on individual establishments (2014)
Working Paper: Effects of cultural diversity on individual establishments (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa11p187

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