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Impacts of Ethnic Diversity in India

The aim of this project is to examine the effects of ethnic diversity on a wide range of social and economic outcome variables using micro level data from India.

Relying on national and cross-country level data, the existing literature has thus far explored a myriad of plausible mechanisms through which ethnolinguistic diversity works to impair the attainment of optimal social and economic outcomes. This strand of literature is said to present what is now known as the diversity-deficit hypothesis.

The diversity-deficit hypothesis is so well-grounded empirically that as Gisselquist, Leiderer, and Niño-Zarazúa (2016) puts it, asking whether diversity has negative implications for socioeconomic outcomes in today’s literature appears irrelevant. Instead, understanding why these relationships exists, i.e. the factors that underlie diversity’s harmful effects on social outcomes seem to be a more optimal direction for future research.

However, in a survey of the literature, it is evident that when micro data is employed, the evidence generally contrasts the conventional wisdom of diversity-deficit/debit. Thus, despite the wide-spread evidence of a negative effective of ethnic diversity using cross-country aggregate data, micro level evidence tends to support the diversity-dividend hypothesis (i.e., a positive effect). For example, using highly disaggregated community-level data from the developing world, Gerring, Thacker, Huang, and Lu (2011) find that ethnic and religious fractionalization is often associated with desirable socioeconomic outcomes.

Similar evidence is presented by Gisselquist et al. (2016) using district-level data for Zambia. They show that ethnic fractionalization has a positive relationship with some key welfare outcomes. Hopkins (2011) also finds mixed effects of diversity on social spending in U.S cities. These findings have ignited the academic discourse on re-examining the diversity-debit hypothesis, with renewed emphasis on micro level evidence.

Accordingly, the aim of this project is to examine the effects of ethnic diversity on a wide range of social and economic outcome variables using micro level data from India. Outcomes of interest include income, poverty, health, inequality, educational attainment, subjective wellbeing, and social capital among others.

This project is led by Sefa Awaworyi Churchill. Other investigators include Meg Elkins and Alberto Posso from the Research Group and Dr Yeti Nisha Madhoo and Dr Shyam Nath from Amrita University, India.