As different US cities attract very different shares of foreign-born we can learn about the value of such вЂdiversityвЂ™ from the long-run equilibrium distribution of wages and prices across cities. The foreign born conceivably have different sets of skills and abilities than the US born, and therefore could serve as valuable factors in the production of differentiated goods and services. Rather than study the short-run effects of new immigrants on the receiving country in a classic model of skill supply and demand, we consider a simple multi-city model of production and consumption in order to ask вЂwhat is the economic value of вЂњdiversityвЂќ that the foreign born bring to each cityвЂ™. These studies typically treat labor markets for different skills as segmented, and focus on the consequences of wages for different skill-groups in the short and medium run. This literature, however, has disproportionately focussed on one aspect of the subject: the impact of low-skilled immigrants on US wages. There is a large and growing body of empirical literature on the consequences of migration (see, among others Borjas 1994, 1995, 1999, 2003 Borjas et al., 1997 Boeri et al., 2002 Card 1990, 2001 Card and Di Nardo, 2000). See Peri (2005) for a comparison of immigration in the US and in the EU during the nineties.

Cons of cultural diversity