Passive tolerance is probably not a concept many people have yet heard of. Let's hope that changes, because "passive tolerance" is the most hopeful bit of academic social psychology research to emerge in a long time. It is the idea that simply living in an area of high diversity rubs off on you, making you more tolerant of ethnic diversity.

Think of all those tiny interactions between different ethnic groups on an average British city street: the newsagent, the corner shop, the delivery driver, the postman, friends laughing, children playing, a pair of lovers. This is what generates passive tolerance. You don't have to be part of the interaction yourself; just witnessing it is enough to have a significant impact – comparable to the effect passive smoking has on your health, hence the term passive tolerance.

This is the finding of seven studies carried out over 10 years in the United States, Europe and South Africa, led by a team of social psychologists at the University of Oxford and published in the journal of the United States National Academy of Sciences. They were careful to rule out the most obvious explanation for their finding, social psychologists Miles Hewstone and Katharina Schmid explain – namely, that the higher levels of tolerance in more diverse neighbourhoods are a result of more tolerant people choosing to live there. Two of the studies were conducted over several years and tracked the same individuals, showing how attitudes changed. Even prejudiced people showed a greater degree of tolerance over time if they lived in a mixed neighbourhood.

The study's positive message is reinforced by the finding of a separate study led by the same Oxford team – the biggest to date in England on diversity and trust. White British people were asked whether they felt ethnic minorities threatened their way of life, increased crime levels, or took their jobs; ethnic minority participants were asked the same questions. Both groups were then asked about how they interact with other groups in everyday situations, such as corner shops, and then about how much they trusted people from their own and other ethnic groups in their neighbourhood. What the study found was that distrust does rise in diverse communities, but day to day, direct contact cancels it out.

The two studies together point to a more optimistic reading of how diversity impacts on urban neighbourhoods.

The reason passive tolerance is politically so important is not hard to see. Sociology and social psychology have frequently been drafted in to the highly charged political debate about community, integration and multiculturalism. Key concepts and ideas take hold in the political sphere and become a rationale for policy. The danger is that oft-quoted ideas can become self-fulfilling. Perhaps the most influential in this area has been US sociologist Professor Robert Putnam, who said diversity has a negative impact on social capital, leading to people "hunkering down", and trust in strangers and neighbourhoods dropping significantly. "Hunkering down" has become a widely quoted phrase as a respectable way for liberals to articulate their growing concern in an increasingly toxic political debate on immigration.

The problematic issue for the left is that lower levels of trust have been linked to declining support for the welfare state. The theory is that if you are less likely to trust the people around you, you are less willing to have a sense of solidarity and so less likely to stump up the taxes to pay for other people's benefits.

The author David Goodhart, for instance, has seized upon Putnam's "hunkering down thesis as vindication of the controversial position he holds has long advanced. He routinely invokes Putnam to argue that the pace and scale of increasing diversity in the UK has been too great and, as he said in a recent interview, people "become less willing to share resources and do the things we require of people in a modern welfare state". The left faces a nasty conundrum as two of its most sacred shibboleths come into conflict: ethnic diversity and the solidarity necessary for a strong welfare state.

This new research throws these conclusions into question. Putnam's work may, after all, have been misleading. In fact, rather than hunkering down, living in a mixed neighbourhood helps you open up. In some ways this vindicates many people's anecdotal experience of their own enjoyment of diversity in their neighbourhoods, and the sense that the most pronounced fear and prejudice is found in exclusively white areas.

The research also vindicates the case for local initiatives to foster social exchange and build community relationships. From carnivals to coffee mornings, jumble sales to fun days in the park – all these are opportunities to generate passive tolerance. Sadly, however, many of these initiatives have fallen victim to local authority funding cuts. The impact of austerity has been compounded by a loss of confidence – in which Putnam's research played its part – about fostering strong diverse communities. Multiculturalism has fallen from favour, misunderstood and maligned as the set of ideas that guided community relations for a generation.

No one was more acutely aware of this danger than Putnam himself when he talked to me on the publication of his research in 2007, the timing made the danger all the more acute in the aftermath of 7/7 bombings. Since then the theme of integration has come to dominate – with its coercive and conformist overtones. The result has been a yawning gap with no positive narrative for the fast-changing diversity of Britain's urban life.

The hope is that this academic research will percolate into policy and public life, inspiring confidence again that strong diverse communities are not only possible, but can also work as beacons, converting residents and visitors alike to a possibility of rich exchange.