DP8621 Diversity and Public Goods: a Natural Experiment with Exogeneous Residential Allocation

Author(s): Yann Algan, Camille Hémet, David Laitin
Publication Date: October 2011
Keyword(s): Discrimination, Fractionalization, Public Good
JEL(s): H10, H41
Programme Areas: International Macroeconomics, Labour Economics, Public Economics, Development Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=8621

This paper demonstrates the effects of ethnic and religious diversity on the quality of public spaces. Its identification strategy relies on the exogeneity of public housing allocations in France, and thereby eliminates the bias from endogenous sorting. The paper uses micro evidence of social interactions within housing blocks from the representative French Housing survey, which allows for a detailed identification of the channels through which diversity operates. Differentiating among three channels of public goods provision, the paper finds that heterogeneity in the housing block leads to low levels of sanctions for anti-social behavior and low levels of collective action to improve housing conditions, but no losses in public safety.