Does labor diversity affect firm productivity?

Arbeitspapier

Using a matched employer-employee data-set, we analyze how workforce diversity in terms of cultural background, education and demographic characteristics affects the productivity of firms in Denmark. Implementing a structural estimation of the firms' production function (Ackerberg et al. 2006), we find that labor diversity in education significantly enhances a firm's value added. Conversely, diversity in ethnicity and demographics induces negative effects on firm productivity. Therefore, the negative effects, which are derived from the communication and integration costs associated with a more culturally and demographically diverse workforce, seem to outweigh the positive effects of creativity and knowledge spillovers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 6973

Classification and Topics

• Classification: Wirtschaft ; Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination ; Economics of Gender; Non-labor Discrimination ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Geographic Labor Mobility; Immigrant Workers ; Labor Standards: Working Conditions ; Firm Objectives, Organization, and Behavior: General
• Subject: labor diversity ; skill complementarity ; communication barriers ; total factor productivity ; Humankapital ; Diversity Management ; Kommunikation ; Produktivität ; Dänemark

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Parrotta, Pierpaolo ; Pozzoli, Dario ; Pytlikova, Mariola
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/67288
• Last update: 10.03.2025, 11:42 AM CET