DIVERSITY, INTEGRATION AND THE ECONOMY

Research

Rationale and Objectives

The Study Group aims to generate original empirical findings on the contribution of cultural diversity to economic performance in host societies; and to help derive policies that can better tap the distinctive cultural-human and social capital of immigrants and their communities, in order to enhance this economic performance.

It will achieve these aims through theoretically controlled empirical research into two sets of questions:

How does immigrant diversity, i.e. the distinctive characteristics, behavioural patterns and social networks of immigrants and ethnic groups, affect their individual labour market performance, as well as productivity, innovation and growth in host areas?
How is the impact of this diversity on economic performance mediated by regulatory frameworks, i.e. legislation and programmes regulating the status, access to welfare and social services, education and employment of immigrants?

The Study Group will draw on its findings to derive practical and policy recommendations at local, national and EU level.
Studying the relationship between diversity, regulatory frameworks and economic performance has a number of normative advantages. First, by exploring the conditions under which immigrants perform well on the labour market or contribute to economic growth and productivity, we avoid pre-commitment to any particular model of acculturation or social interaction. The economic performance of immigrants is a relatively uncontested component of integration, and could therefore provide a criterion for evaluating different models of social or cultural integration. Second, the focus on diversity avoids the assimilationist bias of most integration research. It represents a departure from the traditional assumption that successful integration implies approximation to the characteristics of the native population.

While there is an emerging theoretical literature dealing with the relationships between diversity, economic performance and regulatory frameworks, there are surprisingly few empirical studies, especially with respect to the European context. Moreover, there are no investigations to date that have focused on the precise question of the impact of regulatory frameworks on forms of immigrant capital. The Study Group aims to help close these research gaps. By comparing the impact of different sets of policies and services on the accumulation and utilisation of human-cultural and social capital, we will be able to derive recommendations on how to enhance the economic performance of immigrants and ethnic minorities.

Outline of Research

Our theoretical approach will be informed by recent research on the relationship between immigrants‘ characteristics and conditions in host countries. Building on a “forms of capital“ approach, we shall theorise economic performance of immigrants as a product of the interaction between forms of immigrant capital and conditions in host areas, such as structural economic conditions, host society attitudes towards immigrants, and regulatory frameworks. Of the second set of factors, our focus will be on regulatory frameworks at local, national and EU level.

The notion of “forms of capital“, or what we term “immigrant diversity”, can be defined across three main dimensions:

The distinctive human-cultural capital of individual immigrants (language, values and beliefs, special knowledge and skills associated with place of origin, etc.).
The social capital of migrant networks. This refers to culturally, ethnically or nationally distinctive patterns of social interaction within immigrant communities (trust, loyalty, norms of reciprocity, patterns of communication and information exchange).
The clustering of human-cultural and social capital across space, usually represented by the size and geographical distribution of immigrants and ethnic minority groups.

Based on this framework, the Study Group will conduct empirical research and policy analysis within three closely interrelated Modules (for a short description, see below). All Modules are complementary and inter-dependent. The research Modules will be conducted simultaneously, allowing for ongoing exchange regarding theoretical approaches, hypotheses and methodology, as well as research results as they emerge. Indeed, the mutual exchange of research findings will help respective Modules to further refine their hypotheses, or to test hypotheses from the parallel project. The findings on diversity, integration and the economy derived in will provide the empirical input for policy advice.

Module A: Diversity and Economic Performance

This Module will examine how diversity affects the economy. It will involve two main components. The first of these is econometric analyses of the relationships between forms of capital and individual labour market performance. The second is econometric analyses of the relationships between diversity and innovation, productivity and growth in receiving areas. Both components will draw on individual level and regional data from different German and European sources. In particular, we shall use the IAB Employment Subsample and a special draw from the German Ausländerzentralregister.

Module B: The Role of Regulatory Frameworks

This Module will explore how the rights, legislation and programmes regulating the status, access to welfare, social services, education and employment – what we term regulatory frameworks – mediate the relationships examined in Module A. This will involve qualitative research testing hypotheses on how regulatory frameworks affect forms of capital and ways in which they are invested in host country economies. This will be done through a combination of legal-political analyses of regulatory frameworks and 260 interviews with immigrants and service providers in Germany and the UK. Module B will also provide empirical results regarding human capital accumulation of immigrant and non-immigrant children under varying degrees of ethnic and national diversity in schools. The main source of data will be the Programme for International Student Assessment (PISA), as well as the European Union’s Key Figures on Education in Europe, and Progress in International Reading Literacy Study (PIRLS).

Module C: Practical and Policy Implications

The Study Group will formulate recommendations for integration and labour migration for policies makers at local, national and EU level. Furthermore, the research results are meant to enhance public information on diversity and the economy. To ensure maximal policy and practical relevance, the formulation of these recommendations – as well as the design and dissemination of the empirical research – will be guided by input from a Stakeholder Group drawn from local immigrant groups and ethnic minorities in Hamburg. Our work will also be overseen by an Advisory Board composed of German political figures and international academics. We intend to use our contacts with the Stakeholder Group to support the development of local projects to tap positive forms of immigrant diversity in Hamburg – for example, through better access to information and advice on start-ups, or facilitating the use of transnational social networks that can contribute to economic growth.