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

  • Linda Barrington

    ()

    (The Conference Board)

  • Kenneth R. Troske

    ()

    (University of Missouri-Columbia)

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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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. 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.
  2. 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.
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  7. Evan Osborne, 2000. "The Deceptively Simple Economics of Workplace Diversity," Journal of Labor Research, Transaction Publishers, vol. 21(3), pages 463-476, July.
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  10. 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.
  11. Jonathan S. Leonard, 1984. "Antidiscrimination or Reverse Discrimination: The Impact of Changing Demographics, Title VII, and Affirmative Action on Productivity," Journal of Human Resources, University of Wisconsin Press, vol. 19(2), pages 145-174.
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  14. 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.
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  16. Navarro, Peter, 1988. "Why Do Corporations Give to Charity?," The Journal of Business, University of Chicago Press, vol. 61(1), pages 65-93, January.
  17. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
  18. Bloch, Farrell, 1994. "Antidiscrimination Law and Minority Employment," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226059839.
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