2016
DOI: 10.1186/s40176-016-0060-4
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The regional impact of cultural diversity on wages: evidence from Australia

Abstract: This paper investigates the impact of cultural diversity on labour market outcomes, particularly on wages across regions using a large longitudinal data. We apply an instrumental variable approach and account for individual and time fixed effects. Our findings indicate that the current level of cultural diversity positively affected current regional weekly wages; however, the positive effect holds only partially when the diversity is lagged. The results appear to be robust in all estimations controlling for he… Show more

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Cited by 18 publications
(27 citation statements)
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“…Note that this is the opposite from what Elias and Paradies () find in the Australian context, where native‐born Australians have a much larger positive coefficient than foreign‐born workers.…”
contrasting
confidence: 72%
“…Note that this is the opposite from what Elias and Paradies () find in the Australian context, where native‐born Australians have a much larger positive coefficient than foreign‐born workers.…”
contrasting
confidence: 72%
“…They find that birthplace diversity is positively and robustly correlated with both outcomes, which they interpret as signaling that diversity raises productivity. Similar tests in other advanced economies also detect a positive relationship (Nathan, 2011;Kemeny, 2012;Ager and Bru¨ckner, 2013;Bakens et al, 2013;Bellini et al, 2013;Longhi, 2013;Suedekum et al, 2014;Trax et al, 2015;Elias and Paradies, 2016). And yet these studies leave key issues unresolved, inhibiting our ability to make confident statements about the underlying relationship between diversity and productivity.…”
Section: Existing Literaturementioning
confidence: 99%
“…With few exceptions, existing empirical studies at the urban scale have not measured such institutions, instead testing more generally for the existence and direction of spillovers from diversity. These studies mostly conclude that diversity and productivity are robustly positively related, leading researchers to suggest that immigrant diversity in cities generates tangible economic benefits (Ottaviano and Peri 2006;Nathan 2011;Bellini et al 2013;Suedekum, Wolf, and Blien 2014;Kemeny and Cooke 2015;Trax, Brunow, and Suedekum 2015;Elias and Paradies 2016). Hence, one reason to examine the moderating role of institutions is that it provides the opportunity to estimate a model of diversity's economic impacts that is, compared to much of the extant empirical work, closer to theory.…”
Section: Acknowledgmentsmentioning
confidence: 99%
“…First, it offers new and improved measures of local institutions, triangulating across these in order to have more confidence that they capture the underlying latent variable of interest. Second, in keeping with recent contributions in the literature, notably Bakens, Mulder, and Nijkamp (2013), Trax, Brunow, and Suedekum (2015), Kemeny and Cooke (2015), and Elias and Paradies (2016), it uses an empirical approach that accounts for a wide range of potential confounding factors. Third, it unpacks overall estimates to consider how institutions and diversity operate differently for natives and foreign-born workers.…”
Section: Acknowledgmentsmentioning
confidence: 99%
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