Racial Diversity and Macroeconomic Productivity across US States and Cities

Chad Sparber

No 2007-01, Working Papers from Department of Economics, Colgate University

Abstract: The United States is growing increasingly diverse, so it is important that economists understand the macroeconomic consequences of diversity within the US economy. International analyses often argue that heterogeneity reduces macroeconomic productivity by engendering corruption, political instability, and social turmoil. However, other studies claim that diversity improves creative decision making and augments productivity. This paper exploits differences in diversity across regions of the United States from 1980 to 2000 to determine whether racial heterogeneity creates macroeconomic gains or losses for states and cities. Fixed effects analysis indicates that diversity enhances the productivity of cities. Evidence at the state-level is more ambiguous, as significant results only appear in random effects specifications.

Keywords: Racial Diversity; Macroeconomic Productivity (search for similar items in EconPapers)
JEL-codes: J24 O40 O51 R11 (search for similar items in EconPapers)
Date: 2007-11
New Economics Papers: this item is included in nep-eff, nep-lab and nep-ure
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Citations: View citations in EconPapers (5)

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Journal Article: Racial Diversity and Macroeconomic Productivity across US States and Cities (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cgt:wpaper:2007-01

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