The Urban Economics of Superdiversity

This chapter examines the economic impacts of superdiversity in theory and practice, drawing on the experience of the United Kingdom in the early 2000s. Superdiversity has a largely urban footprint, reflecting the affordances of big cities and the deep history of the “multicultural city.” The chapter builds a simple framework to illustrate superdiversity’s economic effects on production and consumption systems and the roles of (a) higher-skilled migrant groups, (b) physically close or historically linked sending countries, and (c) urban economic/demographic structures. Robustly quantifying superdiversity—in all its dimensions—is challenging. Although a large body of empirical work by economists and others identifies positive economic impacts from demographic change, this work typically proxies for “diversity” using single individual attributes. The chapter outlines alternative proxies using name-based information to identify the distribution of multiple cultural, ethnic, linguistic, and religious groups at the local area level, and then uses this to explore the conceptual framework for the UK case. It then explores group distribution across UK towns and cities in 2001, finding positive links between these initial demographic characteristics and changes in wages and productivity and house prices in the following five years. These differ between urban and nonurban areas. In conclusion, the chapter speculates about how variation in other individual characteristics, arrival routes, levels of mobility, and legal statuses complicate this picture, and suggests ways for future research to incorporate these dimensions into economic analysis.