Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296123 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11034
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Inequality between ethnic groups has been shown to be negatively related to GDP, but research on its effect on contemporary economic growth is limited by the availability of comparable data. We compile a novel and comprehensive dataset of harmonized Gini indices on ethnic inequality for countries and sub-national units between 1992 and 2013. Our approach exploits differentials in nighttime lights (NTL) across ethnic homelands, using new techniques to harmonize NTL series across geographic regions and years to address concerns about spatial and temporal incomparability of satellite photographs. Our new data shows that ethnic inequality is widespread across countries but has decreased over time. Exploiting the artificiality of sub-national borders in an instrumental variable setting, we provide evidence that income inequality across ethnic groups reduces contemporary economic growth. The negative effect of ethnic inequality is caused by increasing conflict and decreasing public goods provision.
Subjects: 
ethnic inequality
economic development
regional data
nighttime lights
satellite photographs
calibration
ethnic groups
conflict
public goods provision
JEL: 
O10
O15
O43
Document Type: 
Working Paper
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