2005/06/22 by Gianmarco I.P. Ottaviano, Giovanni Peri · 8 citations
Social Sciences · Economics, Econometrics and Finance · #Culture, Economy, and Development Studies #Economic Growth and Productivity #Regional Economics and Spatial Analysis
paper · pdf · doi:10.1093/jeg/lbi002
openalex publication_date 2005/06/22 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
What are the economic consequences to U.S. natives of the growing diversity of American cities? Is their productivity or utility affected by cultural diversity as measured by diversity of countries of birth of U.S. residents? We document in this paper a very robust correlation: US-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990, experienced a significant increase in their wage and in the rental price of their housing. Such finding is economically significant and survives omitted variable bias and endogeneity bias. As people and firms are mobile across cities in the long run we argue that, in equilibrium, these correlations are consistent with a net positive effect of cultural diversity on the productivity of natives.