 Income and Ethnic Fractionalisation: Evidence from British MicrodataS Churchill Economic Issues Journal Articles, 2019, vol. 24, issue 1, 21-34 Abstract: Are income levels of a population affected by the degree of ethnic diversity in the population? This study attempts to answer this question, contributing to both the literature on the determinants of income, and the debate on the implications of ethnic diversity. Specifically, we examine the effects of ethnic diversity on household income. We argue that variations in the degree of ethnic diversity across British neighbourhoods can explain a substantial part of the differences in income levels. Using data from the European Values Study, we measure diversity using indices of ethnic fractionalisation for British neighbourhoods, and measure income using household income. We adopt econometric methods that account for endogeneity and find evidence of a negative effect of ethnic diversity on income. We further propose several potential channels that link ethnic fractionalisation to income. Specifically, we explore trust, social capital, discrimination and inequality as important channels through which ethnic diversity influences income. Results are robust to several sensitivity checks. Keywords: Ethnic diversity; ethnic fractionalisation; Britain; income differentials (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eis:articl:119churchill Access Statistics for this article More articles in Economic Issues Journal Articles from Economic Issues Contact information at EDIRC. |
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