In the past several decades, the US has welcomed many immigrants and immigrants from an increasingly wide range of countries. This makes our country more diverse, a phenomenon that is particularly concentrated in our cities. How does this affect the earnings of workers up and down the wage distribution? This research addresses this question by using extensive microdata and fixed effect panel models, to see what happens to individuals' wages as diversity in their workplace and their metropolitan area changes around them.
Key findings: Both low- and high-wage workers gain when U.S. cities become more diverse. Increases in diversity among the highest earners in a city result in dramatic wage gains for all income groups. Low-wage workers benefit from rising diversity in the bottom half of the labor market. Increasing diversity among the lowest earners has either a positive or neutral effect on others.