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

Author

Listed:
  • Andrea Garnero

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique)

  • Stephan Kampelmann

    (ULB - Université libre de Bruxelles = Free University of Brussels)

  • François Rycx

    (ULB - Département d'Informatique [Bruxelles] - ULB - Faculté des Sciences [Bruxelles] - ULB - Université libre de Bruxelles = Free University of Brussels)

Abstract

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.

Suggested Citation

  • Andrea Garnero & Stephan Kampelmann & François Rycx, 2014. "The Heterogeneous Effects of Workforce Diversity on Productivity, Wages, and Profits," PSE-Ecole d'économie de Paris (Postprint) halshs-01510408, HAL.
    • Handle: RePEc:hal:pseptp:halshs-01510408
    DOI: 10.1111/irel.12064
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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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