Abstract
The many growing migratory flows render our societies increasingly heterogeneous. From the point of view of social welfare, achieving all the positive effects of diversity appears as a challenge for our societies. Nevertheless, while it is true that ethnolinguistic diversity involves costs and benefits, at a country level it seems that the former are greater than the latter, even more so when income inequality between ethnic groups is taken into account. In this respect, there is a vast literature at a macro level that shows that ethnolinguistic fragmentation induces lower income, which leads to the conclusion that part of the difference in income observed between countries can be attributed to their different levels of fragmentation. This paper presents primary evidence of the role of education in mitigating the adverse effects of ethnolinguistic fractionalization on the level of income. While the results show a negative association between fragmentation and income for all indices of diversity, the attainment of a certain level of education, especially secondary and tertiary, manages to reverse the sign of the marginal effect of ethnolinguistic fractionalization on income level. Since current societies are increasingly diverse, these results could have major economic policy implications.
Highlights
According to the data of the World Bank, on average, the GDP per capita in high-income countries was over 20 times higher than that of low-income countries
Unlike Buitrago et al [10], who focus on tolerance, and Van Staveren and Pervaiz [9], who stress the inclusion of minorities, we point out that education promotes all these values and constitutes the key element for handling diversity and obtaining all its benefits
A vast number of empirical studies show that ethnolinguistic diversity is negatively associated to economic performance
Summary
According to the data of the World Bank, on average, the GDP per capita in high-income countries was over 20 times higher than that of low-income countries. Robinson et al [1] have highlighted the role of inclusive institutions, which brings us directly to the crucial issue, namely, what has enabled the development of these types of institutions This question has many answers, since the contribution of Easterly and Levine [2], the issue of the ethnolinguistic diversity has become to be one of the most relevant. Based on the data provided by Alesina et al [3], the index of ethnic fractionalization for Central African Republic is the double that of Botswana (0.82 against 0.41). Likewise, this index is over 0.8 for other low-income countries like Chad (0.86), Liberia (0.90) or Madagascar (0.87). They highlight the potential detrimental effects of diversity, which can foster xenophobic attitudes, which, in the end, are those that are really harmful to society as a whole
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