Working Paper No. 846

Is Tolerance Good or Bad for Growth?

Published: August 16, 2010Pages: 34Keywords: Tolerance; Growth; Diversity; Human Capital; Creativity; Innovation JEL-codes: O40; Z13
Published version

Is Tolerance Good or Bad for Growth? Niclas Berggren and Mikael Elinder


We investigate to what extent tolerance, as measured by attitudes toward different types of neighbors, affects economic growth. Data from the World Values Survey enables us to investigate tolerance–growth relationships for 54 countries. We provide estimates based on cross-sectional as well as panel-data regressions. In addition we test for robustness with respect to model specification and sample composition. Unlike previous studies, by Richard Florida and others, we find that tolerance toward homosexuals is negatively related to growth. For tolerance toward people of a different race, we do not find robust results, but the sign of the estimated coefficients is positive, suggesting that inclusion of people irrespective of race makes good use of productive capacity. We propose mechanisms to explain these divergent findings, which clarify why different kinds of tolerance may be of different economic importance.

Niclas Berggren

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Ph: +46 8 665 4520
niclas.berggren@ifn.se

Mikael Elinder

Contact

Ph: +46 18 471 1565
Mob: +46 70 769 0976
mikael.elinder@ifn.se

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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