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The heterogeneous effects of workforce diversity on productivity, wages and profits

Author Info

Listed author(s):
  • Andrea Garnero
  • François Rycx

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, robust to a large set of covariates, specifications and econometric issues, show that educational (age) diversity is beneficial (harmful) for firm productivity and wages. The consequences of gender diversity are found to depend on the technological/knowledge environment of firms. While gender diversity generates significant gains in high-tech/knowledge intensive sectors, the opposite result is obtained in more traditional industries. Overall, findings do not point to sizeable productivity-wage gaps except for age diversity.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 13-015.

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Length: 39 p.
Date of creation: 16 Apr 2013
Publication status: Published by:
Handle: RePEc:sol:wpaper:2013/143122
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Keywords: Labour diversity; productivity; wages; linked panel data; GMM;

Other versions of this item:

Find related papers by 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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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Cited by:

  1. Jozef Konings & Luca Marcolin, 2014. "Do wages reflect labor productivity? The case of Belgian regions," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-21, December.
  2. Rycx, Francois & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute for the Study of Labor (IZA).
  3. Marc Gürtler & Oliver Gürtler, 2015. "The Optimality of Heterogeneous Tournaments," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 1007-1042.
  4. Beaurain, Guillaume & Masclet, David, 2016. "Does affirmative action reduce gender discrimination and enhance efficiency? New experimental evidence," European Economic Review, Elsevier, vol. 90(C), pages 350-362.
  5. John S. Heywood & Uwe Jirjahn, 2015. "The German Labor Market for Older Workers in Comparative Perspective," Research Papers in Economics 2015-02, University of Trier, Department of Economics.
  6. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2014. "Labor diversity and firm productivity," European Economic Review, Elsevier, vol. 66(C), pages 144-179.
  7. Vincent Vandenberghe, 2015. "Is Workforce Diversity Good for Efficiency?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2015015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  8. Romina R. Giuliano & Stephan Kampelmann & Benoît Mahy & François Rycx, 2017. "Short notice, big difference? The effect of temporary employment on firm competitiveness across sectors," Working Papers CEB 17-008, ULB -- Universite Libre de Bruxelles.
  9. Stephan Kampelmann & François Rycx, 2016. "Wage discrimination against immigrants: measurement with firm-level productivity data," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-24, December.
  10. John S. Heywood & Uwe Jirjahn, 2016. "The hiring and employment of older workers in Germany: a comparative perspective
    [Die Beschäftigung und Neueinstellung älterer Arbeitnehmer in Deutschland: Eine vergleichende Perspektive]    ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(4), pages 349-366, December.
  11. Lone Engbo Christiansen & Huidan Lin & Joana Pereira & Petia Topalova & Rima Turk, 2016. "Gender Diversity in Senior Positions and Firm Performance; Evidence from Europe," IMF Working Papers 16/50, International Monetary Fund.
  12. International Monetary Fund, 2016. "Italy; Selected Issues," IMF Staff Country Reports 16/223, International Monetary Fund.
  13. Artz, Benjamin & Taengnoi, Sarinda, 2016. "Do women prefer female bosses?," Labour Economics, Elsevier, vol. 42(C), pages 194-202.

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