Does Ethnic Similarity Increase Well-Being?

How do people react to ethnic (dis)similarity? Whereas prior studies on ethnic diversity and intergroup contact often focus on interpersonal outcomes such as prejudice and trust, we turn to an essential intrapersonal phenomenon: well-being. We argue that ethnic similarity in the local setting increases well-being for both the ethnic majority and ethnic minority but for theoretically different reasons. To test our argument, we combine Danish registry data with panel survey data from all fourth- to ninth-grade students in Danish public schools ((Formula presented.)). Across different identification strategies, we find that higher levels of classroom ethnic similarity increase well-being. Further, whereas being in a dominant position promotes well-being among the ethnic majority, simply having someone increases minority students’ well-being. This points to the complex nature of intergroup integration but also suggests that local settings with some minority members may foster minorities’ well-being without substantively reducing the well-being of the ethnic majority.