Yann ALGAN, Department faculty member and Dean of Sciences Po’s School of Public Affairs, has just published an important paper in The Journal of Political Economy with Camille HÉMET (PhD SciencesPo ‘13, Assistant Professor at l’ENS) and David LAITIN (Stanford) – The Social Effects of Ethnic Diversity at the Local Level: A Natural Experiment with Exogenous Residential Allocation.

“One of the most significant challenges that modern societies face, and at the same time one of our greatest opportunities, is the growing ethnic and social diversity in most developed countries”. Robert Putnam (2007).

The notion of diversity refers to the fact that members of a community differ in certain characteristics linked to ethnic origin, socio-economic status and culture. With increasing commerce, economic integration and migration, the degree of diversity within modern societies grows ever greater. Understanding the impact of ethnic diversity on the economy in a broad sense, but also on social relations and living conditions, has become a priority. Numerous university studies sometimes demonstrate a negative relationship between ethnic diversity and growth, the quality of public goods and confidence, and a positive relationship between diversity by country of origin and wealth and productivity. However, these studies, conducted at a relatively aggregate geographic level, do not grasp precisely the mechanisms involved.

In this article, Yann Algan, Camille Hémet and David Laitin study the effect of diversity on the well-being and satisfaction of individuals vis-a-vis their housing conditions. They use a highly localised, micro-geographical approach, observing public housing blocks, allowing them to pursue their enquiries in the light of social relations between neighbours. In the French system, social housing (HLM) is allocated without regard for ethnic origin or individual diversity preferences. The authors use this feature, which from a methodological point of view, they contextualise as a “natural experiment” and permits them to consider the level of diversity of a given HLM quarter as exogenous. In other terms, this article offers a causal analysis between the decrease or growth in the level of diversity and different social indicators. The results are mixed. On one hand, the lack of credible social sanctions and of collective action in more diverse neighborhoods leads to a lower quality of the commons, such as basic equipment, for which proprietors and property managers are responsible (for example, central heating systems and lifts). On the other hand, they find no significant impact of diversity on attacks, criminality or violence in the neighborhood, translated as more indifference than enmity between neighbors . The key open question is how public policy could build social capital in such a context.

Algan, Laitin and Hémet propose an over-arching and convincing interpretation of these concurrent results that promises a new avenue for research and policy-making.

To find out why, read their paper published in The Journal of Political Economy (University of Chicago Press) “The Social Effects of Ethnic Diversity at the Local Level: A Natural Experiment with Exogenous Residential Allocation” (earlier, ungated version, PDF)