Ethnic diversity and informal work in Ghana

Arbeitspapier

We present the first study that examines the effects of ethnic diversity on informal work. Using two waves of data from the Ghana Socioeconomic Panel Survey, we find that ethnic diversity is associated with a higher probability of engaging in informal work. Specifically, our instrumental variable estimates suggest that a unit increase in ethnic diversity is associated with up to a 26.3 percentage point increase in the probability of engaging in informal work. This result is robust to alternative estimation approaches and alternative ways of measuring ethnic diversity. Our results also show that trust, which is lower in ethnically diverse neighbourhoods, is an important channel through which ethnic diversity operates to increase the probability of engaging in informal work. Our results point to the need for policies that promote trust between diverse ethnic groups in heterogeneous societies.

Object Details

• ISBN: 978-92-9256-883-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2020/126

Classification and Topics

• Classification: Wirtschaft ; Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination ; Informal Labor Markets ; Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
• Subject: ethnic diversity ; informal work ; informality ; trust ; Ghana

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Awaworyi Churchill, Sefa ; Danquah, Michael
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2020

Further information

• DOI: doi:10.35188/UNU-WIDER/2020/883-2
• Handle: http://hdl.handle.net/10419/229350
• Last update: 10.03.2025, 11:43 AM CET