We investigate how tolerance, as measured by attitudes toward different types of neighbors, affects economic growth in a sample of 54 countries. 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.
Is Tolerance Good or Bad for Growth?
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