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Does Higher Social Diversity Affect People’s Contributions to Local Schools? Evidence from New Zealand

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New Zealand is becoming more socially diverse, in common with other Western countries. Primarily U.S. based-evidence suggests that growing diversity may lower people’s participation in society, and their contributions towards public goods. We test whether there is evidence of a similar relationship in New Zealand, specifically between social diversity and voluntary contributions towards local schools. We use data from the New Zealand Ministry of Education and the Census for the years 2001 and 2006 to estimate whether social heterogeneity affects a school’s ability to raise funds locally. Individual school revenue data is matched with measures of the heterogeneity of the neighbourhood in which the school is located. We consider heterogeneity by language, ethnicity, religion and income. After running cross-section and fixed effects regressions which control for other factors, we find only limited evidence that diversity affects the financial support schools receive from their local communities. We do find that higher nominal household income inequality lowers the revenues schools collect from fundraising, but not the revenues they receive from parental contributions or donations.

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  • Hayden Armstrong & Jeremy Clark, 2011. "Does Higher Social Diversity Affect People’s Contributions to Local Schools? Evidence from New Zealand," Working Papers in Economics 11/34, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:11/34
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    1. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    2. Natalia Letki, 2008. "Does Diversity Erode Social Cohesion? Social Capital and Race in British Neighbourhoods," Political Studies, Political Studies Association, vol. 56, pages 99-126, March.
    3. Samuel Thornton & Jeremy Clark, 2010. "Does higher social diversity lower people's contributions to public goods? The case of volunteering in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 44(1), pages 27-59.
    4. Natalia Letki, 2008. "Does Diversity Erode Social Cohesion? Social Capital and Race in British Neighbourhoods," Political Studies, Political Studies Association, vol. 56(1), pages 99-126, March.
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