Achieving the American Dream: Cultural Distance, Cultural Diversity and Economic Performance

Feb 2016 | 140

Authors: Valeria Rueda Guillaume Laval, Etienne Patin


Abstract:

This article explores the role of individual cultural distance on income, using the genetic distance as a proxy for cultural distance. We show that cultural distance has heterogeneous predictive power. In particular, culturally distant individuals living in regions with other individuals from more trusting ancestries or less xenophobic ones are more likely to be economically successful. First generation migrants seem to be less likely to success the more culturally distant they are, but this effect vanishes as time spent in the USA increases. Our research challenges the static view that cultural differences are necessarily an obstacle to economic performance in the long-run. Our interpretation of the results is robust to the use of alternative measures for cultural distance.

JEL Codes: J61, N30, O15, Z13, Z15 r

Keywords: Cultural Distance, Cultural Diversity, Genetics, Historical Persistence, Labor Participation, Social Capital


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