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Workforce Diversity and Productivity: An Analysis of Employer-Employee Match Data

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Author Info

  • Linda Barrington

    () (The Conference Board)

  • Kenneth R. Troske

    () (University of Missouri-Columbia)

Abstract

Calls for workforce diversity abound; arguments in support of diversity at the workplace suggest that we are a better society when we work together. In a recent opinion poll, 81% of respondents said that it is somewhat or very important “to have employees of different races, cultures and backgrounds in the workplace or businesses.” However, the actual economic costs and benefits to workforce diversity are unclear. The goal of this paper is to empirically assess the relationship between workforce diversity and the economic performance of an establishment. We use the New Worker-Establishment Characteristics Database (NWECD), a nationwide employer-employee matched data set, to estimate the association between productivity and workforce diversity. These data allow us to overcome many of the limitations of past studies because the NWECD is an establishment-level data set. Our main finding is that diversity is either positively associated with productivity or there is no significant relationship between diversity and productivity. We never find a significant negative relationship between establishment-level diversity and productivity. This leads us to conclude that establishments that employ a more diverse workforce are no less productive than establishments that employ a more homogeneous workforce.

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File URL: http://www.conference-board.org/publications/publicationdetail.cfm?publicationid=1130
File Function: First version, 2001
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Bibliographic Info

Paper provided by The Conference Board, Economics Program in its series Economics Program Working Papers with number 01-02.

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Length: 32 pages
Date of creation: Apr 2001
Date of revision:
Handle: RePEc:cnf:wpaper:0102

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  1. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  2. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
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  4. James J. Heckman & Brook S. Payner, 1989. "Determining the Impact of Federal Antidiscrimination Policy on the Economic Status of Blacks: A Study of South Carolina," NBER Working Papers 2854, National Bureau of Economic Research, Inc.
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  6. Lisa M Lynch & Sandra E Black, 2002. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," Working Papers 02-04, Center for Economic Studies, U.S. Census Bureau.
  7. Harry J. Holzer & David Neumark, 2000. "What does affirmative action do?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(2), pages 240-271, January.
  8. Haltiwanger, John C. & Lane, Julia I. & Spletzer, James R., 2007. "Wages, productivity, and the dynamic interaction of businesses and workers," Labour Economics, Elsevier, vol. 14(3), pages 575-602, June.
  9. Evan Osborne, 2000. "The Deceptively Simple Economics of Workplace Diversity," Journal of Labor Research, Transaction Publishers, vol. 21(3), pages 463-476, July.
  10. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1997. "Market Forces and Sex Discrimination," NBER Working Papers 6321, National Bureau of Economic Research, Inc.
  11. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
  12. Bloch, Farrell, 1994. "Antidiscrimination Law and Minority Employment," University of Chicago Press Economics Books, University of Chicago Press, number 9780226059839, September.
  13. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, September.
  14. David Neumark & Peter Cappelli, 1999. "Do "High Performance" Work Practices Improve Establishment-Level Outcomes?," NBER Working Papers 7374, National Bureau of Economic Research, Inc.
  15. John Haltiwanger & Marilyn E. Manser & Robert Topel, 1998. "Labor Statistics Measurement Issues," NBER Books, National Bureau of Economic Research, Inc, number halt98-1, April.
  16. David Neumark & Harry Holzer, 2000. "Assessing Affirmative Action," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 483-568, September.
  17. Lucia Foster & John Haltiwanger & C.J. Krizan, 1998. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Working Papers 6803, National Bureau of Economic Research, Inc.
  18. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 1996. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," NBER Working Papers 5626, National Bureau of Economic Research, Inc.
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Cited by:
  1. Schneider, Lutz, 2011. "Zum Einfluss von Alter und Erfahrung auf Produktivitäts- und Lohnprofile - Befunde einer Linked-Employer-Employee-Analyse," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48728, Verein für Socialpolitik / German Economic Association.
  2. Chicha, Marie-Thérèse, 2006. "A comparative analysis of promoting pay equity : models and impacts," ILO Working Papers 399524, International Labour Organization.
  3. Lutz Schneider, 2006. "Sind ältere Beschäftigte weniger produktiv? Eine empirische Analyse anhand des LIAB," IWH Discussion Papers 13, Halle Institute for Economic Research.
  4. Chicha, Marie-Thérèse, 2006. "Analyse comparative de la mise en oeuvre du droit à l'égalité de rémunération : modèles et impacts," ILO Working Papers 392033, International Labour Organization.

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