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What Types of Diversity Benefit Workers? Empirical Evidence on the Effects of Co-Worker Dissimilarity on the Performance of Employees

  • Fidan Ana Kurtulus

    ()

    (University of Massachusetts Amherst)

This paper explores the consequences of grouping workers into diverse divisions on the performance of employees using a dataset containing the detailed personnel records of a large U.S. firm from 1989-1994. In particular, I examine the effects of demographic dissimilarity among co-workers, namely differences in age, gender and race among employees who work together within divisions, and non-demographic dissimilarity, namely differences in education, work function, firm tenure, division tenure, performance and wages among employees within divisions. I find evidence that age dissimilarity, dissimilarity in firm tenure, and performance dissimilarity are associated with lower worker performance, while wage differences are associated with higher worker performance. My analysis also reveals that the effects of certain types of dissimilarities get smaller in magnitude the longer a worker is a part of a division. Finally, the paper provides evidence that the relationships between performance and the various measures of dissimilarity vary by occupational area and division size. JEL Categories: D2, J1, J2, J3, J8, L2, M5

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File URL: http://www.umass.edu/economics/publications/2011-11.pdf
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Paper provided by University of Massachusetts Amherst, Department of Economics in its series UMASS Amherst Economics Working Papers with number 2011-11.

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Date of creation: Jun 2011
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Handle: RePEc:ums:papers:2011-11
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  1. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-80, June.
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  12. Milgrom, Paul R, 1988. "Employment Contracts, Influence Activities, and Efficient Organization Design," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 42-60, February.
  13. Kato, Takao & Shu, Pian, 2008. "Performance Spillovers and Social Network in the Workplace: Evidence from Rural and Urban Weavers in a Chinese Textile Firm," IZA Discussion Papers 3340, Institute for the Study of Labor (IZA).
  14. Michael Gibbs & Wallace Hendricks, 2004. "Do Formal Salary Systems Really Matter?," ILR Review, Cornell University, ILR School, vol. 58(1), pages 71-93, October.
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  16. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 101(2), pages 363-82, May.
  17. Finis Welch, 1967. "Labor-Market Discrimination: An Interpretation of Income Differences in the Rural South," Journal of Political Economy, University of Chicago Press, vol. 75, pages 225.
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