Cities and Cultures

38 Pages Posted: 8 Sep 2004

See all articles by Gianmarco I.P. Ottaviano

Gianmarco I.P. Ottaviano

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation

Giovanni Peri

University of California, Davis - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 2004

Abstract

We investigate the existence of wage premium due to cultural diversity across US cities. Using census data from 1970 to 1990, we find that at the urban level richer diversity is systematically associated with higher average nominal wages for white US-born males. We measure cultural diversity in a city using the variety of languages spoken by city-residents. While the positive correlation between wages and diversity survives a battery of robustness checks, it seems to be larger once foreign cultures have been assimilated. Finally, instrumental variable estimation hints at causation going from diversity to wages. Comparing real and nominal wages across cities, we interpret these results as evidence that diversity enhances productivity.

Keywords: Cultural diversity, Productivity, Wages, Metropolitan areas

JEL Classification: O4, R0, F1

Suggested Citation

Ottaviano, Gianmarco I.P. and Peri, Giovanni, Cities and Cultures (May 2004). FEEM Working Paper No. 92.04. Available at SSRN: https://ssrn.com/abstract=556243 or http://dx.doi.org/10.2139/ssrn.556243

Gianmarco I.P. Ottaviano (Contact Author)

Bocconi University - Department of Economics and Paolo Baffi Centre on Central Banking and Financial Regulation ( email )

Via Gobbi 5
Milan, 20136
Italy

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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