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Racial Diversity and Aggregate Productivity in U.S. Industries: 1980-2000

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Abstract

This paper employs industry-level U.S. Census data from 1980-2000 to assess the aggregate effects of racial diversity. While most international accounts find that diversity reduces productivity, I argue that the U.S. experience is more nuanced. Unqualified statements about the costs and merits of diversity are unwarranted, as racial heterogeneity increases productivity within many, but not all, industries. Sectors employing a large number of workers responsible for creative decision-making and customer service experience gains from diversity, while industries characterized by high levels of group effort suffer losses. The results thus reconcile two competing literatures by suggesting that diversity improves decision-making and problem solving, but also encumbers common action and public goods provision.

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File URL: http://commons.colgate.edu/cgi/viewcontent.cgi?article=1001&context=econ_facschol
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Paper provided by Department of Economics, Colgate University in its series Working Papers with number 2007-02.

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Date of creation: Nov 2007
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Handle: RePEc:cgt:wpaper:2007-02

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Keywords: Racial Diversity; Productivity;

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  4. Chad Sparber, 2010. "Racial Diversity and Macroeconomic Productivity across US States and Cities," Regional Studies, Taylor & Francis Journals, vol. 44(1), pages 71-85.
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Cited by:
  1. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2010. "Does Labor Diversity Affect Firm Productivity?," Working Papers 10-12, University of Aarhus, Aarhus School of Business, Department of Economics.
  2. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Spatial Economics Research Centre, LSE.
  3. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2014. "Labor diversity and firm productivity," European Economic Review, Elsevier, vol. 66(C), pages 144-179.
  4. Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration and Wages," Working Papers 91, University of California, Davis, Department of Economics.
  5. Ager, Philipp & Brückner, Markus, 2013. "Cultural diversity and economic growth: Evidence from the US during the age of mass migration," European Economic Review, Elsevier, vol. 64(C), pages 76-97.
  6. Wunnava, Phanindra V. & Mitra, Aniruddha & Prasch, Robert E., 2012. "Globalization, Institutions, and the Ethnic Divide: Recent Longitudinal Evidence," IZA Discussion Papers 6459, Institute for the Study of Labor (IZA).
  7. Peri, Giovanni & Sparber, Chad, 2010. "Highly-Educated Immigrants and Native Occupational Choice," Working Papers 2010-09, Department of Economics, Colgate University.
  8. Ryusuke Ihara & Shizu Yamamoto, 2012. "Does labor diversity cause agglomeration in Japan?: an NEG approach with a covariance structure analysis," ERSA conference papers ersa12p430, European Regional Science Association.
  9. Ryusuke Ihara, 2011. "Agglomeration with the pros and cons of labor heterogeneity," ERSA conference papers ersa11p528, European Regional Science Association.

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