Diversity and 'economic assimilation' of immigrant workers: evidence from cities in the USA

Abstract

We examine if barriers to communication, created through differences in language, culture, religion or race, retard economic assimilation of immigrants workers in American metropolitan areas. Employing a panel dataset for three census years: 1980, 1990 and 2000; we estimate the impact of diversity on labour productivity (measured as average wage). Our findings indicate: one, racial diversity reduces labour productivity; two, linguistic diversity and cultural diversity enhance labour productivity, but barriers to communication mitigate the positive effects of linguistic diversity. We also discuss preliminary results of the investigation on the impact of diversity on wage gaps between immigrant and native workers.