Birthplace diversity and private giving: Evidence from China

Abstract

The inescapable migration-related diversity has profound social, economic, and political consequences for the host society. This paper exploits spatial and temporal variations in birthplace diversity to identify its causal effect on household donation in China. Leveraging a novel longitudinal dataset, the paper finds that higher birthplace diversity at the city level decreases donation for local neighborhood affairs and community services, but it does hopefully encourage donation for poverty alleviation and disaster relief, and donation for educational aid and health care. Further findings, while are in support of failures in cooperation as the popular mechanism behind the adverse effects of birthplace diversity, indicate that the positive effects of birthplace diversity are primarily driven by changes in emotional states such as perceived fairness, moral values, empathic and responsible awareness. This paper complements the literature on diversity and public goods provision by highlighting the necessity of distinguishing various kinds of public goods and considering the salience of diversity under local specific contexts.