Abstract
Using a matched employer-employee dataset, 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. Conversely, diversity in ethnicity and demographics induces negative effects on firm productivity. 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.
| Original language | English |
|---|---|
| Place of publication | London |
| Publisher | Norface Research Programme on Migration |
| Number of pages | 30 |
| Publication status | Published - 2011 |
Keywords
- Labor diversity
- Total Factor Productivity