Singapore’s Ethnic Integration Policy

I am teaching economics in Singapore until the end of February, and just observing the city and the neighborhoods is fascinating. Chinese, Malays, Indians, Europeans (mostly British/Australian/etc.) live together in this vibrant and multicultural city. One thing that attracts attention in Singapore is how the government manages relationships between communities. About 38% of the population is not a Singaporean citizen, which is quite unique. Mandarin Chinese, other Chinese dialects, Malay and Tamil, as well as English are the languages spoken at home. In the street or in shops, English and Chinese are the primary modes of communication. The Chinese community is the largest one, and the prime minister has been Chinese from the independence of country until now — Lee Kuan Yew and Goh Chok Tong.

One thing that is particularly striking in Singapore is that communities live side by side, and do not seem to have abandoned their traditions and culture. Family traditions are alive and well in Singapore. As the economics literature points out there are a number of challenges in such a diverse and multicultural country:

  • discrimination (preference-based or statistical discrimination) may be hindering the proper allocation of talent in the economy.
  • segregated neighborhoods may emerge naturally from the individual residential location choices of families. In particular, ghettos might emerge, and particular subcultures that do not promote work and achievement may drive the behavior of some communities.

Public policies have been designed to maintain some degree of integration across communities in Singapore. One of them is the policy of quotas in social housing. Social housing can be owned/sold by the tenants, as in some parts of the UK (since Margaret Thatcher’s right to buy policy). But there is an additional twist compared to the UK’s Right to buy policy:¬† it is not possible to sell to a buyer from a community that is overrepresented in the neighborhood compared to the national fraction of, say, Chinese.

Maisy Wong, an assistant professor at the University of Pennsylvania  has looked at the impact of this quota policy on the actual composition of neighborhoods and on prices. She compiled a unique dataset: since it is quite hard to get census data on the ethnicity of local residents, she used the phonebook and a mapping of names to ethnicities to look at the spatial distribution of ethnicities across neighborhoods. One thing that she shows in her paper is that the policy is not so strictly implemented: there is a number of neighborhoods where Chinese inhabitants are overrepresented. But still, her econometric analysis suggests that there is a premium in the price of housing in neighborhoods that are just above the quota limit. This is a good indication that there are indeed preferences for neighbors of the same ethnicity in Singapore.

Sources

Statistics Singapore, Latest Data.

Description of the Ethnic Integration Policy, at HDB Website.

Maisy Wong, Estimating the Impact of the Ethnic Housing Quotas in Singapore, University of Pennsylvania, January 3, 2011.

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