Historical industrialisation, path dependence and contemporary culture: the lasting imprint of economic heritage on local communities

Culture matters for regional economic development and is one source of cognitive lock-in that influences path creation and dependency. However, little is known about the sources of regional variation in culture. This study explores the long-term imprinting effect of the Industrial Revolution on cultural practices across local communities in Great Britain. Historical data from 1891 on the employment in large-scale industries (e.g. textiles and steel) is used to estimate causal effects of industrialisation on five cultural dimensions. It is found that historical industrialisation is still reflected in contemporary local cultures marked by lower engagement with education and employment, less adherence to social rules but stronger collective action and social cohesion. It is concluded that one reason for the relatively poor effect of the public policies on local and regional economic development is that historical industrialisation has left a lasting legacy on contemporary culture in many places that impairs institutional efforts to foster change.

Immigrant diversity, integration and worker productivity: uncovering the mechanisms behind ‘diversity spillover’ effects

A growing body of research is demonstrating a robust positive relationship between the diversity of a city’s foreign-born population in the USA and worker productivity. Other research has focused on diversity within firms, similarly finding positive effects in many cases. Although it appears that diverse teams within firms are better at problem-solving and are more creative, the exact mechanism(s) that drive the relationship between diversity and productivity at the scale of city-regions are less apparent and underexplored in extant research. Drawing on research from several fields, I describe four mechanisms that might drive the relationship between immigrant diversity and productivity at the urban level. I explore each mechanism with a pseudo panel of workers and fixed effects OLS regressions across U.S. Metropolitan Statistical Areas between 2011 and 2017. The results most strongly support that at the urban level, diversity enhances productivity through what I call ‘exposure effects’ and ‘interactive problem-solving’, wherein workers become more productive and more creative through exposure to new cultures and ways of thinking and through joint problem-solving. These results suggest that positive externalities arise when coupling rising immigrant diversity with the social integration of people from diverse backgrounds.

The persistence of apartheid regional wage disparities in South Africa

In this article, we use a new economic geography (NEG) model to estimate the extent to which the persistence in apartheid regional wage disparities in South Africa is an outcome of economic forces such as market access. We estimate a structural wage equation derived directly from the NEG theory for 354 regions over the period 1996 to 2011. We find support for an augmented NEG model in explaining regional wage disparities across regions in South Africa, although the market access effects are highly localised in view of high distance coefficients. We also find, even after controlling for NEG and other region-specific characteristics, a persistent wage deficit in the former homelands, where under apartheid black South Africans were forcefully relocated according to their ethnic groups. Average wages of workers in homelands remained approximately 17% lower than predicted between 1996 and 2011, despite the reintegration of these regions into South Africa and the implementation of regional policies after the end of apartheid.