Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/104555 
Year of Publication: 
2014
Series/Report no.: 
Research Papers in Economics No. 10/14
Publisher: 
Universität Trier, Fachbereich IV – Volkswirtschaftslehre, Trier
Abstract: 
The European Union emphasizes the advantages arising from diversity. However, economic studies prove that diversity can lead to detrimental outcomes, ultimately resulting in lower well-being. This paper assesses the direct link between well-being and diversity within a society, in terms of ethnicity, language, and religion. I find that ethnic diversity is linearly and positively related to happiness and life satisfaction. The other dimensions of social diversity and well-being are related in a U-shape. At low levels of diversity an increase reduces well-being. The relationship becomes positive only if diversity is sufficiently high. I argue that a threat to the dominant position of one group prevents the formation of a common identity. If diversity is sufficiently high, the groups have to establish contact which reduces prejudices and helps to form a common identity.
Subjects: 
Social Diversity
Common Identity
Group Threat
Tolerant Societies
JEL: 
I3
Z1
Document Type: 
Working Paper

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