This paper studies both theoretically and empirically the determinants of group formation and of the degree of participation when the population is heterogeneous, both in terms of income and race or ethncity. We are especially interested in whether and how much the degree of heterogeneity in communities infuences the amount of participation in different types of groups. Using survey data on group membership and data on US localities, we find that, after controlling for many individual characteristics, participation in social activities is significatively lower in more unequal and in more racially or ethnically fragmented localities. We also find that those individuals who express views against racial mixing are less prone to participate in groups the more racially heterogeneous their community is.
Author(s): Alberto Alesina (Harvard University, MIT and NBER), Eliana La Ferrara (Bocconi University and IGIER)