Cities and Cultures

Gianmarco Ottaviano and Giovanni Peri

No 4438, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We investigate the existence of wage premium due to cultural diversity across US cities. Using census data from 1970 to 1990, we find that at the urban level richer diversity is systematically associated with higher average nominal wages for white US-born males. We measure cultural diversity in a city using the variety of languages spoken by city-residents. While the positive correlation between wages and diversity survives a battery of robustness checks, it seems to be larger once foreign cultures have been assimilated. Finally, instrumental variable estimation hints at causation going from diversity to wages. Comparing real and nominal wages across cities, we interpret these results as evidence that diversity enhances productivity.

Keywords: Cultural diversity; Productivity; Wages; Metropolitan areas (search for similar items in EconPapers)
JEL-codes: F10 O40 (search for similar items in EconPapers)
Date: 2004-06
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Citations: View citations in EconPapers (9)

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Related works:
Chapter: Cities and cultures (2021)
Journal Article: Cities and cultures (2005)
Working Paper: Cities and Cultures (2004)
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