Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229350
Authors: 
Awaworyi Churchill, Sefa
Danquah, Michael
Year of Publication: 
2020
Series/Report no.: 
WIDER Working Paper No. 2020/126
Abstract: 
We present the first study that examines the effects of ethnic diversity on informal work. Using two waves of data from the Ghana Socioeconomic Panel Survey, we find that ethnic diversity is associated with a higher probability of engaging in informal work. Specifically, our instrumental variable estimates suggest that a unit increase in ethnic diversity is associated with up to a 26.3 percentage point increase in the probability of engaging in informal work. This result is robust to alternative estimation approaches and alternative ways of measuring ethnic diversity. Our results also show that trust, which is lower in ethnically diverse neighbourhoods, is an important channel through which ethnic diversity operates to increase the probability of engaging in informal work. Our results point to the need for policies that promote trust between diverse ethnic groups in heterogeneous societies.
Subjects: 
ethnic diversity
informal work
informality
trust
Ghana
JEL: 
J15
J46
O17
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-883-2
Document Type: 
Working Paper

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