Does Labor Diversity affect Firm Productivity?

Pierpaolo Parrotta, Dario Pozzoli and Mariola Pytlikova

No 2011022, Norface Discussion Paper Series from Norface Research Programme on Migration, Department of Economics, University College London

Abstract: Using a matched employer-employee data-set, we analyze how workforce diversity in cultural background, education and demographic characteristics affects 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. Hence, the negative effects, coming from communication and integration costs connected to a more culturally and demographically diverse workforce, seem to outweigh the positive effects coming from creativity and knowledge spillovers.

Keywords: Labor diversity; skill complementarity; communication barriers; total factor productivity. (search for similar items in EconPapers)
JEL-codes: C23 J24 L20 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-bec, nep-edu, nep-eff, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

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Related works:
Working Paper: Does Labor Diversity Affect Firm Productivity? (2012)
Working Paper: Does Labor Diversity Affect Firm Productivity? (2010)
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