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The chapter embraces the definition of diversity which refers to the composition of a society, namely to economic, cultural and physical differences among individuals and groups within a society, due to differences in race, language, ethnicity, nationality and gender, to mention a few. This chapter surveys the empirical literature on social fractionalization and diversity, focusing on two aspects. The first main section of the chapter is devoted to the choice of the variable used to identify groups and to the associated datasets. The second main section reviews studies that have investigated the impacts of social fractionalization and diversity on a number of socioeconomic variables, such as growth, development, quality of institutions, rise of conflict and wages.

Over the last decade, the assessment and measurement of diversity has increasingly become an object of interest for economists and other social scientists. The concept of diversity can be applied to a wide variety of contexts, spanning from biodiversity and conservation policies to socioeconomic diversity. The first main section of this chapter is devoted to the conceptualization and measurement of diversity. Alternative taxonomies proposed in the existing literature are discussed and the axiomatic approach to the analysis of diversity is illustrated. The second main section of the chapter is devoted to the measurement of fractionalization, namely to the analysis of diversity when the population is partitioned according to social characteristics, such as language, religion or nationality. The most relevant fractionalization indices are presented, highlighting the links with other disciplines such as ecology, biology and sociology.

The chapter discusses how economic insecurity has been measured, and the implications of different measurement strategies. After clarifying the common conceptual elements in available definitions of economic insecurity, it presents a summary of the four main measurement strategies developed in the current emerging empirical literature on economic insecurity, which emphasize: (1) large income losses; (2) the buffering role of wealth; (3) income volatility relative to personal trend; and (4) the hazards of unemployment, illness, family break-up and old age. Although there is now no consensus on which measurement method produces the best explanatory measure of economic insecurity, results are qualitatively similar and robust across different methods. Concluding remarks emphasize the importance of economic insecurity for public policy.