Racial Diversity and Aggregate Productivity in U.S. Industries: 1980-2000

Posted: 27 Mar 2009

See all articles by Chad Sparber

Chad Sparber

Colgate University - Economics Department

Date Written: March, 27 2009


This paper employs industry-level U.S. Census data from 1980-2000 to assess the aggregate effects of racial diversity. While most international accounts find that diversity reduces productivity, I argue that the U.S. experience is more nuanced. Unqualified statements about the costs and merits of diversity are unwarranted, as racial heterogeneity increases productivity within many, but not all, industries. Sectors employing a large number of workers responsible for creative decision-making and customer service experience gains from diversity, while industries characterized by high levels of group effort suffer losses. The results thus reconcile two competing literatures by suggesting that diversity improves decision-making and problem solving, but also encumbers common action and public goods provision.

Keywords: Racial Diversity, Productivity

JEL Classification: O40, J24, O51

Suggested Citation

Sparber, Chad, Racial Diversity and Aggregate Productivity in U.S. Industries: 1980-2000 (March, 27 2009). Southern Economic Journal, Vol. 75, No. 3, 2009, Available at SSRN: https://ssrn.com/abstract=1369133

Chad Sparber (Contact Author)

Colgate University - Economics Department ( email )

13 Oak Drive
Hamilton, NY 13346
United States

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