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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/economics/workingpapers.cfm?pdf=E-0007-01-WP
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. Kenneth R Troske & Kimberly N Bayard & Judith Hellerstein & David Neumark, 1998. "New Evidence On Sex Segregation And Sex Differences In Wages From Matched Employee-Employer Data," Working Papers 98-18, Center for Economic Studies, U.S. Census Bureau.
  3. David Neumark & Peter Cappelli, 1999. "Do "High Performance" Work Practices Improve Establishment-Level Outcomes?," NBER Working Papers 7374, National Bureau of Economic Research, Inc.
  4. Bloch, Farrell, 1994. "Antidiscrimination Law and Minority Employment," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226059839.
  5. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162.
  6. Harry J. Holzer & David Neumark, 1998. "What Does Affirmative Action Do?," NBER Working Papers 6605, National Bureau of Economic Research, Inc.
  7. Harry Holzer & David Neumark, 1999. "Assessing Affirmative Action," NBER Working Papers 7323, National Bureau of Economic Research, Inc.
  8. Jonathan S. Leonard, 1983. "Anti-Discrimination or Reverse Discrimination: The Impact of Changing Demographics, Title VII and Affirmative Action on Productivity," NBER Working Papers 1240, National Bureau of Economic Research, Inc.
  9. Sandra E. Black & Lisa M. Lynch, 1997. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," NBER Working Papers 6120, National Bureau of Economic Research, Inc.
  10. 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.
  11. Judith K. Hellerstein & David Neumark & Kenneth R. Troske, 2002. "Market Forces and Sex Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 353-380.
  12. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
  13. Heckman, James J & Payner, Brook S, 1989. "Determining the Impact of Federal Antidiscrimination Policy on the Economic Status of Blacks: A Study of South Carolina," American Economic Review, American Economic Association, vol. 79(1), pages 138-77, March.
  14. John Haltiwanger & C J Krizan & Lucia Foster, 1998. "Aggregate Productivity Growth: Lessons From Microeconomic Evidence," Working Papers 98-12, Center for Economic Studies, U.S. Census Bureau.
  15. Evan Osborne, 2000. "The Deceptively Simple Economics of Workplace Diversity," Journal of Labor Research, Transaction Publishers, vol. 21(3), pages 463-476, July.
  16. 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.
  17. John Haltiwanger & Julia Lane & James Spletzer, 2000. "Wages, Productivity, and the Dynamic Interaction of Businesses and Workers," NBER Working Papers 7994, National Bureau of Economic Research, Inc.
  18. John Haltiwanger & Marilyn E. Manser & Robert Topel, 1998. "Labor Statistics Measurement Issues," NBER Books, National Bureau of Economic Research, Inc, number halt98-1.
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Citations

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Cited by:
  1. Chicha, Marie-Thérèse, 2006. "A comparative analysis of promoting pay equity : models and impacts," ILO Working Papers 399524, International Labour Organization.
  2. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2014. "Labor diversity and firm productivity," European Economic Review, Elsevier, vol. 66(C), pages 144-179.
  3. 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.
  4. Lutz Schneider, 2006. "Sind ältere Beschäftigte weniger produktiv? Eine empirische Analyse anhand des LIAB," IWH Discussion Papers 13, Halle Institute for Economic Research.
  5. 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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