The new Oded Galor and Quamrul Ashraf paper

Here is from an editorial summary published in Science (gated):

…Ashraf and and Galor present the hypothesis that genetic diversity has exerted a long-lasting effect on economic development—which is quantified as population density in the precolonial era and as per-capita income for contemporary nations—beyond the influences of geography, institutions, and culture. They posit that intermediate levels of heterozygosity allow for a productive balance between the social costs of high diversity and the creative benefits of higher variance in cognitive skills. They show that the optimal level of diversity was approximately 0.68 in 1500 CE, and that this increased to 0.72 (which is pretty much where the United States sits) in the year 2000, with the most homogeneous country, Bolivia, placed at 0.63 and the most diverse country, Ethiopia, at 0.77. Just how large an effect are we talking about? They estimate that genetic diversity accounts of 16% of the cross-country dispersion in per-capita income; put in another way, shifting the diversity of the United States higher or lower by one percentage point would decrease per-capita income by 1.9%.

One version of the paper is here, and it will be coming out in the American Economic Review.  Being on the road, I have yet to read this work.


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