Journal of Population Economics

, Volume 30, Issue 1, pp 265–306 | Cite as

Ethnic diversity and well-being

  • Alpaslan Akay
  • Amelie Constant
  • Corrado Giulietti
  • Martin Guzi
Original Paper

Abstract

This paper investigates how ethnic diversity, measured by immigrants’ nationalities, influences the well-being of the host country. Using panel data from Germany from 1998 to 2012, we find a positive effect of ethnic diversity on the well-being of German natives. Our finding is robust to alternative definitions of ethnic diversity and to the non-random selection of natives and immigrants into regions. The positive effect of ethnic diversity is stronger for immigrant groups that are culturally and economically closer to Germany. Consistent with this result, we document the existence of two mechanisms explaining the influence of ethnic diversity on well-being: productivity—as captured by immigrants’ skills and assimilation—and social capital—particularly in relation to the creation of a multicultural environment.

Keywords

Ethnic diversity Subjective well-being Assimilation Multiculturality 

JEL Classification

C90 D63 J61 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  • Alpaslan Akay
    • 1
  • Amelie Constant
    • 2
  • Corrado Giulietti
    • 3
  • Martin Guzi
    • 4
  1. 1.University of GothenburgGothenburgSweden
  2. 2.Princeton UniversityPrincetonUSA
  3. 3.University of SouthamptonSouthamptonUK
  4. 4.Masaryk UniversityBrnoCzech Republic

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