Population diversity and regional economic growth

Abstract

"Demographic change, immigration, and the increasing labor market participation of women give rise to significant changes in workforce composition and population diversity in many countries. This handbook chapter provides an overview of the literature on the economic effects of population diversity, focusing on the impact of diversity on regional productivity and growth. We first briefly discuss the theoretical arguments that link growth and productivity to diversity. From a theoretical perspective, the net impact of diversity is indeterminate because there are various positive and negative effects attributed to demographic heterogeneity. We then address the measurement of population diversity and discuss the identification of its economic effects. Thereafter, we review the empirical evidence on the relationship between diversity and economic performance. The findings of a rapidly increasing number of studies do not offer a clear-cut answer either. There is some evidence of a positive correlation between diversity and economic performance, but the impact of population diversity seems to be on average quantitatively modest. Moreover, the results of several studies point to heterogeneous effects, in particular with respect to the skill level of the workforce, tasks of the workers and across industries. The heterogeneity of effects raises the question whether mediating factors such as institutions and organizational structures matter in this context. However, little is known so far about the role of mediating factors and the significance of different mechanisms through which population diversity may impact on regional growth." (Author's abstract, IAB-Doku) ((en))

Cite article

Niebuhr, A. & Peters, J. (2020): Population diversity and regional economic growth. In: M. M. Fischer & P. Nijkamp (Hrsg.) (2020): Handbook of regional science, Berlin, Springer p. 1-17. DOI:10.1007/978-3-642-36203-3_128-1