Public Choice

, Volume 150, Issue 1–2, pp 283–308 | Cite as

Is tolerance good or bad for growth?

Article

Abstract

We investigate how tolerance, as measured by attitudes toward different types of neighbors, affects economic growth in a sample of 54 countries. Unlike previous studies, by Richard Florida and others, we find that tolerance toward homosexuals is negatively related to growth. For tolerance toward people of a different race, we do not find robust results, but the sign of the estimated coefficients is positive, suggesting that inclusion of people irrespective of race makes good use of productive capacity. We propose mechanisms to explain these divergent findings, which clarify why different kinds of tolerance may be of different economic importance.

Keywords

Tolerance Growth Diversity Human capital Creativity Innovation 

JEL Classification

O40 Z13 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Acemoglu, D., Johnson, S., & Robinson, J. A. (2005). Institutions as a fundamental cause of long-run growth. In P. Aghion & S. N. Durlauf (Eds.), Handbook of economic growth (Vol. 1A, pp. 385–472). Amsterdam: Elsevier. CrossRefGoogle Scholar
  2. Aghion, P., Caroli, E., & García-Peñalosa, C. (1999). Inequality and economic growth: the perspectives of the new growth theories. Journal of Economic Literature, 37(4), 1615–1660. CrossRefGoogle Scholar
  3. Ahmed, A., & Hammarstedt, M. (2010). Sexual orientation and earnings: a register-data approach to identify homosexuals. Journal of Population Economics, 23(3), 835–849. CrossRefGoogle Scholar
  4. Andersen, R., & Fetner, T. (2008). Economic inequality and intolerance: attitudes toward homosexuality in 35 democracies. American Journal of Political Science, 52(4), 942–958. CrossRefGoogle Scholar
  5. Antecol, H., Jong, A., & Steinberger, M. (2008). The sexual orientation wage gap: the role of occupational sorting and human capital. Industrial and Labor Relations Review, 61(4), 518–543. Google Scholar
  6. Aron, J. (2000). Growth and institutions: a review of the evidence. The World Bank Research Observer, 15(1), 99–135. CrossRefGoogle Scholar
  7. Barro, R. J. (1991). Economic growth in a cross-section of countries. Quarterly Journal of Economics, 106(2), 407–443. CrossRefGoogle Scholar
  8. Barro, R. J. (1996). Democracy and growth. Journal of Economic Growth, 1(1), 1–27. CrossRefGoogle Scholar
  9. Barro, R. J. (2000). Inequality and growth in a panel of countries. Journal of Economic Growth, 5(1), 5–32. CrossRefGoogle Scholar
  10. Barro, R. J., & Lee, J.-W. (2010). A new data set of educational attainment in the world, 1950–2010. NBER Working Paper No. 15902. Cambridge: National Bureau of Economic Research. CrossRefGoogle Scholar
  11. Barron, J. M., Struckman-Johnson, C., Quevillon, R., & Banka, S. R. (2008). Heterosexual men’s attitudes toward gay men: a hierarchical model including masculinity, openness, and theoretical explanations. Psychology of Men & Masculinity, 9(3), 154–166. CrossRefGoogle Scholar
  12. Basuchoudhary, A., & Shughart II, W. F. (2010). On ethnic conflict and the origins of transnational terrorism. Defence and Peace Economics, 21(1), 65–87. CrossRefGoogle Scholar
  13. Becker, G. S. (1971). The economics of discrimination. Chicago: University of Chicago Press. Google Scholar
  14. Berggren, N., & Jordahl, H. (2005). Does free trade really reduce growth? Further testing using the economic freedom index. Public Choice, 122(1–2), 99–114. CrossRefGoogle Scholar
  15. Berggren, N., Elinder, M., & Jordahl, H. (2008). Trust and growth: a shaky relationship. Empirical Economics, 35(2), 251–274. CrossRefGoogle Scholar
  16. Bergh, A., & Karlsson, M. (2010). Government size and growth: accounting for economic freedom and globalization. Public Choice, 142(1–2), 195–213. CrossRefGoogle Scholar
  17. Beugelsdijk, S., de Grooty, H. L. F., & van Schaikz, A. B. T. M. (2004). Trust and economic growth: a robustness analysis. Oxford Economic Papers, 56(1), 118–134. CrossRefGoogle Scholar
  18. Bjørnskov, C. (2008). The growth–inequality association: government ideology matters. Journal of Development Economics, 87(2), 300–308. CrossRefGoogle Scholar
  19. Black, D. A., Sanders, S. G., & Taylor, L. J. (2007). The economics of lesbian and gay families. Journal of Economic Perspectives, 21(2), 53–70. CrossRefGoogle Scholar
  20. Boschma, R. A., & Fritsch, M. (2007). Creative class and regional growth: empirical evidence from eight European countries. Jena Economic Research Paper No. 66. Jena: Friedrich Schiller University and Max Planck Institute. Google Scholar
  21. Bosworth, B. P., & Collins, S. M. (2003). The empirics of growth: an update. Brookings Papers on Economic Activity, 34(2), 113–206. CrossRefGoogle Scholar
  22. Buchanan, J. M., & Congleton, R. D. (1997). Politics by principle, not interest: toward nondiscriminatory democracy. Cambridge: Cambridge University Press. Google Scholar
  23. Buchanan, J. M., & Tullock, G. (1962). The calculus of consent: logical foundations of constitutional democracy. Ann Arbor: University of Michigan Press. Google Scholar
  24. Butklewicz, J. L., & Yanikkaya, H. (2006). Institutional quality and economic growth: maintenance of the rule of law or democratic institutions, or both? Economic Modelling, 23(4), 648–661. CrossRefGoogle Scholar
  25. Charles, K. K., & Guryan, J. (2008). Prejudice and wages: an empirical assessment of Becker’s The economics of discrimination. Journal of Political Economy, 116(5), 773–809. CrossRefGoogle Scholar
  26. Corneo, G., & Jeanne, O. (2009). A theory of tolerance. Journal of Public Economics, 93(5–6), 691–702. CrossRefGoogle Scholar
  27. Dincer, O. C., & Uslaner, E. M. (2010). Trust and growth. Public Choice, 142(1–2), 59–67. CrossRefGoogle Scholar
  28. Doucouliagos, C., & Ulubasoglu, M. A. (2006). Economic freedom and economic growth: does specification make a difference? European Journal of Political Economy, 22(1), 60–81. CrossRefGoogle Scholar
  29. Doucouliagos, H., & Ulubasoglu, M. A. (2009). Democracy and economic growth: a meta-analysis. American Journal of Political Science, 57(1), 61–83. Google Scholar
  30. Egan, P. J., Edelman, M. S., & Sherrill, K. (2009). Findings from the Hunter College poll: new discoveries about the political attitudes of lesbians, gays and bisexuals. Unpublished manuscript. New York: Hunter College. Google Scholar
  31. Ekehammar, B., & Akrami, N. (2003). The relation between personality and prejudice: a variable- and a person-centred approach. European Journal of Personality, 17(5), 449–464. CrossRefGoogle Scholar
  32. Embrick, D. G., Walther, C. S., & Wickens, C. M. (2007). Working class masculinity: keeping gay men and lesbians out of the workplace. Sex Roles, 56(11–12), 757–766. CrossRefGoogle Scholar
  33. Finkel, S. E. (1995). Causal analysis with panel data. Thousand Oaks: Sage. Google Scholar
  34. Florida, R. (2002a). The rise of the creative class: and how it’s transforming work, leisure, community and everyday life. New York: Basic Books. Google Scholar
  35. Florida, R. (2002b). Bohemia and economic geography. Journal of Economic Geography, 2(1), 5571. CrossRefGoogle Scholar
  36. Florida, R. (2003). Cities and the creative class. City & Community, 2(1), 319. CrossRefGoogle Scholar
  37. Florida, R. (2004). Revenge of the squelchers. The Next American City, 5. http://creativeclass.com/rfcgdb/articles/Revenge_of_the_Squelchers_long%20report.pdf. Accessed 20 February 2009.
  38. Florida, R., & Gates, G. (2001). Technology and tolerance: the importance of diversity to high-technology growth. Washington: The Brookings Institution. Google Scholar
  39. Florida, R., & Mellander, C. (2010). There goes the metro: how and why bohemians, artists and gays affect regional housing values. Journal of Economic Geography, 10(2), 167–188. CrossRefGoogle Scholar
  40. Florida, R., Mellander, C., & Qian, H. (2008a). Creative China? The university, tolerance, talent in Chinese regional development. Working Paper No. 145. Stockholm: CESIS, Royal Institute of Technology. Google Scholar
  41. Florida, R., Mellander, C., & Stolarick, K. (2008b). Inside the black box of regional development—human capital, the creative class and tolerance. Journal of Economic Geography, 8(5), 615–649. CrossRefGoogle Scholar
  42. Friedman, B. M. (2005). The moral consequences of economic growth. New York: Knopf. Google Scholar
  43. Glaeser, E. L. (2005). Review of Richard Florida’s The rise of the creative class. Regional Science and Urban Economics, 35(5), 593–596. CrossRefGoogle Scholar
  44. Glaeser, E. L., & Saiz, A. (2004). The rise of the skilled city. Brookings-Wharton Papers on Urban Affairs, 5, 47–94. CrossRefGoogle Scholar
  45. Glaeser, E. L., Scheinkman, J. A., & Shleifer, A. (1995). Economic growth in a cross-section of cities. Journal of Monetary Economics, 36(1), 117–143. CrossRefGoogle Scholar
  46. Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2004). Do institutions cause growth? Journal of Economic Growth, 9(2), 271–303. CrossRefGoogle Scholar
  47. Granovetter, M. (1983). The strength of weak ties: a network theory revisited. Sociological Theory, 1, 201–233. CrossRefGoogle Scholar
  48. Grell, O. P., & Porter, R. (Eds.) (2000). Toleration in enlightenment Europe. Cambridge: Cambridge University Press. Google Scholar
  49. Gustavsson, M., & Jordahl, H. (2008). Inequality and trust in Sweden: some inequalities are more harmful than others. Journal of Public Economics, 92(1–2), 348–365. CrossRefGoogle Scholar
  50. Gwartney, J. D., & Lawson, R. A. (2008). Economic freedom of the world. Vancouver: The Fraser Institute. Google Scholar
  51. Hanushek, E. A., & Woessman, L. (2009). Do better schools lead to more economic growth? Cognitive skills, economic outcomes, and causation. NBER Working Paper No. 14633. Cambridge: National Bureau of Economic Research. CrossRefGoogle Scholar
  52. Herek, G. M. (2000). The psychology of sexual prejudice. Current Directions in Psychological Science, 9(1), 19–22. CrossRefGoogle Scholar
  53. Heston, A., Summers, R., & Aten, B. (2009). Penn world table version 6.3. Philadelphia: Center for International Comparisons of Production, Income and Prices, University of Pennsylvania. Google Scholar
  54. Hsiao, C. (2007). Panel data analysis—advantages and challenges. TEST, 16(1), 1–22. CrossRefGoogle Scholar
  55. Hubert, M., Rousseeuw, P. J., & Van Aelst, S. (2004). Robustness. In B. Sundt & J. Teugels (Eds.), Encyclopedia of actuarial sciences (pp. 1515–1529). New York: Wiley. Google Scholar
  56. Inglehart, R., & Abramson, P. R. (1999). Measuring postmaterialism. American Political Science Review, 93(3), 665–677. CrossRefGoogle Scholar
  57. Inglehart, R., & Welzel, C. (2005). Modernization, cultural change and democracy. Cambridge: Cambridge University Press. Google Scholar
  58. Inglehart, R., Basañez, M., Diez-Medrano, J., Halman, L., & Luijkx, R. (2004). Human beliefs and values: a crosscultural sourcebook based on the 1999–2002 values surveys. Mexico: Siglo XXI Editores. Google Scholar
  59. Israel, J. (1995). The Dutch republic: its rise, greatness and fall 1477–1806. Oxford: Oxford University Press. Google Scholar
  60. Knack, S., & Keefer, P. (1995). Institutions and economic performance: cross-country tests using alternative institutional measures. Economics and Politics, 7(3), 207–227. CrossRefGoogle Scholar
  61. Knowles, S. (2005). Inequality and economic growth: the empirical relationship reconsidered in the light of comparable data. Journal of Development Economics, 41(1), 135–159. Google Scholar
  62. Levine, R., & Renelt, D. (1992). A sensitivity analysis of cross-country growth regressions. American Economic Review, 82(4), 942–963. Google Scholar
  63. Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2), 407–437. CrossRefGoogle Scholar
  64. Marlet, G., & van Woerkens, C. (2005). Tolerance, aesthetics, amenities or jobs? Dutch city attraction to the creative class. Discussion Paper No. 33. Utrecht, the Netherlands: Tjalling C. Koopmans Research Institute, Utrecht School of Economics, University of Utrecht. Google Scholar
  65. Marlet, G., & van Woerkens, C. (2007). The Dutch creative class and how it fosters urban employment growth. Urban Studies, 44(13), 2605–2626. CrossRefGoogle Scholar
  66. McGranahan, D. A., & Wojan, T. R. (2007). Recasting the creative class to examine growth processes in rural and urban counties. Regional Studies, 41(2), 197–216. CrossRefGoogle Scholar
  67. Mellander, C., & Florida, R. (2007). The creative class or human capital? Explaining regional development in Sweden. Working Paper No. 79. Stockholm: CESIS, Royal Institute of Technology. Google Scholar
  68. Mokyr, J. (1990). The lever of riches: technological creativity and economic progress. Oxford: Oxford University Press. Google Scholar
  69. North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge: Cambridge University Press. CrossRefGoogle Scholar
  70. Nyström, K. (2009). Is entrepreneurship the salvation for enhanced economic growth? In M. V. Bradshaw & P. T. Carrington (Eds.), Entrepreneurship and its economic significance, behavior and effects. New York: Nova Science Publishers. Google Scholar
  71. Ottaviano, G. I. P., & Peri, G. (2006). The economic value of cultural diversity: evidence from U.S. cities. Journal of Economic Geography, 6(1), 9–44. CrossRefGoogle Scholar
  72. Page, S. E. (2007). The difference: how the power of diversity creates better groups, firms, schools, and societies. Princeton: Princeton University Press. Google Scholar
  73. Plug, E., & Berkhout, P. (2008). Sexual orientation, disclosure and earnings. IZA Discussion Paper No. 3290. Bonn: IZA. Google Scholar
  74. Ríos-Figueroa, J., & Staton, J. (2008). Unpacking the rule of law: a review of judicial independence measures. Committee of Concepts and Methods Working Paper No. 21. Mexico City: International Political Science Association. Google Scholar
  75. Rodrik, D., Subramanian, A., & Trebbi, F. (2004). Institutions rule: the primacy of institutions over geography and integration in economic development. Journal of Economic Growth, 9(2), 131–165. CrossRefGoogle Scholar
  76. Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 90(5), 1002–1037. CrossRefGoogle Scholar
  77. Romer, P. M. (1990). Endogenous technical change. Journal of Political Economy, 98(5), S71–S102. CrossRefGoogle Scholar
  78. Ross, M. W. (1989). Married homosexual men: prevalence and background. Marrriage & Family Review, 14(3–4), 35–57. CrossRefGoogle Scholar
  79. Rousseeuw, P. J. (1984). Least median of squares regression. Journal of the American Statistical Association, 79(388), 871–880. CrossRefGoogle Scholar
  80. Rousseeuw, P. J., & Leroy, A. M. (1987). Robust regression and outlier detection. New York: Wiley. CrossRefGoogle Scholar
  81. Rousseeuw, P. J., & Van Driessen, K. (2006). Computing LTS regression for large data sets. Data Mining and Knowledge Discovery, 12(1), 29–45. CrossRefGoogle Scholar
  82. Sala-í-Martin, X. (1997). I just ran two million regressions. American Economic Review, 87(2), 178–183. Google Scholar
  83. Shapiro, J. M. (2006). Smart cities: quality of life, productivity, and the growth effects of human capital. The Review of Economics and Statistics, 88(2), 324–335. CrossRefGoogle Scholar
  84. Sternberg, R. J. (Ed.) (1999). Handbook of creativity. Cambridge: Cambridge University Press. Google Scholar
  85. Stratton, L. S. (2007). Examining the wage differential between married and cohabiting men. Economic Inquiry, 40(2), 199–212. CrossRefGoogle Scholar
  86. Sturm, J.-E., & de Haan, J. (2005). Determinants of long-term growth: new results applying robust estimation and extreme bounds analysis? Empirical Economics, 30(3), 597–617. CrossRefGoogle Scholar
  87. Temple, J. (1999). The new growth evidence. Journal of Economic Literature, 37(1), 112–156. CrossRefGoogle Scholar
  88. Verboven, S., & Hubert, M. (2005). LIBRA: a MATLAB library for robust analysis. Chemometrics and Intelligent Laboratory Systems, 75(2), 127–136. CrossRefGoogle Scholar
  89. Zak, P. J., & Knack, S. (2001). Trust and growth. Economic Journal, 111(470), 295–321. CrossRefGoogle Scholar
  90. Zaman, A., Rousseeuw, P. J., & Orhan, M. (2001). Econometric applications of high-breakdown robust regression techniques. Economics Letters, 71(1), 1–8. CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.The Ratio InstituteStockholmSweden
  2. 2.The Ratio InstituteStockholmSweden
  3. 3.The Research Institute of Industrial Economics (IFN)StockholmSweden
  4. 4.Uppsala Center for Fiscal Studies, Department of EconomicsUppsala UniversityUppsalaSweden

Personalised recommendations