Cultural Diversity

Abstract

This paper provides the first systematic attempt to measure cultural diversity at national and subnational levels. Our measure reflects the degree to which values and beliefs are shared in society and captures a dimension of diversity not previously discussed. We assess the importance of cultural diversity for socioeconomic outcomes by focusing on its role in fostering generalized trust within societies. We find that among the many dimensions of diversity previously researched, our cultural diversity measure is the single most important determinant of trust.

Keywords: cultural diversity, values, polarization, political ideology, trust

JEL Classification: H0, P0, O10, O5, Z1