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The Heterogeneous Effects of Workforce Diversity on Productivity, Wages and Profits

  • Garnero, Andrea
  • Kampelmann, Stephan
  • Rycx, François

We estimate the impact of workforce diversity on productivity, wages and productivity-wage gaps (i.e. profits) using detailed Belgian linked employer-employee panel data. Findings show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. While gender diversity is found to generate significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Estimates neither vary substantially with firm size nor point to sizeable productivity-wage gaps except for age diversity.

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Paper provided by CEPREMAP in its series CEPREMAP Working Papers (Docweb) with number 1304.

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Length: 51 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:cpm:docweb:1304
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  1. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
  2. Garnero, Andrea & Kampelmann, Stephan & Rycx, Francois, 2013. "Part-time Work, Wages and Productivity: Evidence from Belgian Matched Panel Data," IZA Discussion Papers 7789, Institute for the Study of Labor (IZA).
  3. Fidan Ana Kurtulus, 2011. "What Types of Diversity Benefit Workers? Empirical Evidence on the Effects of Co-Worker Dissimilarity on the Performance of Employees," UMASS Amherst Economics Working Papers 2011-11, University of Massachusetts Amherst, Department of Economics.
  4. Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 98-128, 02.
  5. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
  6. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2011. "Does Labor Diversity affect Firm Productivity?," Norface Discussion Paper Series 2011022, Norface Research Programme on Migration, Department of Economics, University College London.
  7. Navon, Guy, 2009. "Human Capital Spillovers in the Workplace: Labor Diversity and Productivity," MPRA Paper 17741, University Library of Munich, Germany.
  8. Haile, Getinet Astatike, 2009. "Unhappy Working with Men? Workplace Gender Diversity and Employee Job-Related Well-Being in Britain: A WERS2004 Based Analysis," IZA Discussion Papers 4077, Institute for the Study of Labor (IZA).
  9. Christian Göbel & Thomas Zwick, 2012. "Age and Productivity: Sector Differences," De Economist, Springer, vol. 160(1), pages 35-57, March.
  10. Susana Iranzo & Fabiano Schivardi & Elisa Tosetti, 2008. "Skill Dispersion and Firm Productivity: An Analysis with Employer-Employee Matched Data," Journal of Labor Economics, University of Chicago Press, vol. 26(2), pages 247-285, 04.
  11. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
  12. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
  13. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer, vol. 27(2), pages 303-364, April.
  14. Laura Giuliano & David I. Levine & Jonathan Leonard, 2011. "Racial Bias in the Manager-Employee Relationship: An Analysis of Quits, Dismissals, and Promotions at a Large Retail Firm," Journal of Human Resources, University of Wisconsin Press, vol. 46(1), pages 26-52.
  15. Stephan Kampelmann & François Rycx, 2012. "Are Occupations Paid What They are Worth? An Econometric Study of Occupational Wage Inequality and Productivity," De Economist, Springer, vol. 160(3), pages 257-287, September.
  16. William J. Carrington & Kristin McCue & Brooks Pierce, 2000. "Using Establishment Size to Measure the Impact of Title VII and Affirmative Action," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 503-523.
  17. Vegard Skirbekk, 2003. "Age and individual productivity: a literature survey," MPIDR Working Papers WP-2003-028, Max Planck Institute for Demographic Research, Rostock, Germany.
  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.
  19. Alessandra Cataldi & Stephan Kampelmann & François Rycx, 2012. "Does it pay to be productive? The case of age groups," International Journal of Manpower, Emerald Group Publishing, vol. 33(3), pages 264-283, March.
  20. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  21. Shoba Arun & Thankom Arun, 2002. "ICTs, gender and development: women in software production in Kerala," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(1), pages 39-50.
  22. Vandenberghe, V., 2013. "Are firms willing to employ a greying and feminizing workforce?," Labour Economics, Elsevier, vol. 22(C), pages 30-46.
  23. Judith K. Hellerstein & David Neumark, 1995. "Are Earnings Profiles Steeper Than Productivity Profiles? Evidence from Israeli Firm-Level Data," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 89-112.
  24. Pekka Ilmakunnas & Seija Ilmakunnas, 2011. "Diversity at the Workplace: Whom Does it Benefit?," De Economist, Springer, vol. 159(2), pages 223-255, June.
  25. M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
  26. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  27. G�nter K Stahl & Martha L Maznevski & Andreas Voigt & Karsten Jonsen, 2010. "Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups," Journal of International Business Studies, Palgrave Macmillan, vol. 41(4), pages 690-709, May.
  28. repec:iso:wpaper:0158 is not listed on IDEAS
  29. Amil Petrin & Brian P. Poi & James Levinsohn, 2004. "Production function estimation in Stata using inputs to control for unobservables," Stata Journal, StataCorp LP, vol. 4(2), pages 113-123, June.
  30. van Ark, Bart, 1998. "Productivity," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 171-174, June.
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