The Soft Bias of High Expectations?

(Please take note that Professor Bainbridge has update his post; see my two updates at the bottom.)

Professor Bainbridge has an interesting post up regarding the effects (or lack thereof) of diversity on workplace productivity. The question is whether diverse teams -- mixing people of various ages, races, and demographic backgrounds -- are more, less, or equally as productive as homogeneous teams. Bainbridge states:

It turns out that there is considerable evidence that homogeneous work teams tend to be more productive [than heterogeneous work teams].

Now, Bainbridge has done some research in this area; I have not. But if this is his thesis, he doesn't offer much evidence to support it. To the contrary, the evidence he does offer seems to refute it.

He cites Diversity, Discrimination, and Performance as support. The paper's abstract states that "[d]iversity of race or gender within the workplace does not predict sales or sales growth, although age diversity predicts low sales." But this is no support for Bainbridge's sweeping proposition -- it merely states that age diversity may decrease sales, but that other forms of diversity have no apparent effect on productivity.

Bainbridge also cites Corporate Governance, Board Diversity, and Firm Performance, which actually found that diversity on a firm's board of directors to be beneficial: "After controlling for size, industry, and other corporate governance measures, we find significant positive relationships between the fraction of women or minorities on the board and firm value." Obviously, this too is no support for Bainbridge's conclusion.

The best support for Bainbridge's position is Diversity and Productivity in Production Teams:

Our results indicate that teams with more heterogeneous worker abilities are more productive. Holding the distribution of team ability constant, teams with greater diversity in age are less productive, and those composed only of one ethnicity (Hispanic workers in our case) are more productive[.]

This result, however, is highly suspect. As the paper notes, "the findings for team demographics are not robust to alternative model specifications." Indeed, the paper studied only "Hispanics [at] . . . a [single] garment plant" over three years. Given that the study is based upon a single manufacturing plant in a low-skill industry and upon workers who, by virtue of their ethnic background and presumed educational level, are likely to be less proficient in English, the paper's tentative conclusion that diversity (and, possibly, only linguistic diversity) at this plant may harm productivity should come as no surprise. But there's no basis to extrapolate this extremely limited finding to the general workplace.

This paper doesn't -- and can't -- address whether its finding holds true for other plants, or other industries, or other ethniticies, or other jobs (law, medicine, education, finance). In fact, there's evidence that it doesn't hold true for higher-skill jobs, such as company boards (supra).

Indeed, to the extent that we can draw any conclusions from these studies -- and I'm not convinced we can yet -- they seem to be that (1) diversity in age negatively impacts worker productivity and (2) a linguistically-heterogeneous workplace negatively impacts worker productivity (no surprise). In other circumstances, there is either no good evidence, or the evidence suggests that diversity has no effect upon -- and may actually increase -- worker productivity. This is a far cry from Bainbridge's conclusion that "there is considerable evidence that homogeneous work teams tend to be more productive."

UPDATE: As indicated by my exchange with Dave Schuler in comments, it appears that Professor Bainbridge is updating his post. (The post is currently -- at 1:09 p.m. CDT/Indiana -- a bit of a scramble.) I would note that Bainbridge's additional conclusion -- "that on balance the economic incentive of employers is to pursue workplace homogeneity" -- doesn't really address whether diverse workplaces are, on balance, more or less productive than non-diverse workplaces. Moreover, when Bainbridge is talking about the "economic incentive of employers," he is really discussing the "economic incentive of management"; this shouldn't be confused with (for it is frequently contrary to) the economic interests of the company or its shareholders.

UPDATE 2: Professor Bainbridge has fully updated his post, and it's much more defensible. Bainbridge's point that "an employer's preference for racial sameness won't always be motivated by racial animus" is perfectly legitimate, I think, on the grounds that he cites -- essentially, that it's easier to manage a homogeneous workforce. But, as a noted in my first update, this doesn't quite answer the question as to whether it is in the company's or shareholder's economic interest to foster diversity, even though it may not be in the empoyer's (read: management's) interest. And I still think that the jury is still out on the question of whether diversity might ultimately be in the company's or its owner's interests, even though it increases the costs on management.

Comments

[Dave Schuler]

von:

I really need to read Bainbridge's post and whatever other supporting or contradicting info I can find on this subject before commenting intelligently. But one of the two conjectures with which you conclude the post supports one of my pet peeves: that the age cohort system fostered by our educational system is unrealistic and possibly dysfunctional

[Dave Schuler]

von:

You're right. Bainbridge would appear to have overstated his case. However, his real point—the concluding line of his post—may still be correct:

On balance, however, it seems unlikely that workplace diversity can be justified on grounds that it increases firm productivity or profitability. Instead, proponents of diversity requirements ought to rely on other justifications.

Most of the arguments I've seen for racial diversity in the workplace, for example, justice, civil comity, or past discimination are other justifications.

[von]

However, his real point—the concluding line of his post—may still be correct:

It looks like Bainbridge updated, because that's no longer the concluding line. (The rest of the post seems to have remained the same.) I'll update as well.

[Dave Schuler]

The Critical Race Theory paper that Professor Bainbridge cites in the update and new conclusion to his post is interesting. If I understand the principles of CRT correctly, race is not an immutable feature but a sociological feature that may change over time as a result of changes in attitude and affect by both members of groups previously considered to be of different race as well as changes in attitude and affect of those who hold this view. An example of this would be the Irish in America. Originally, they were not held to be white. This changed as both the attitudes, affect, and behavior of all of the Irish immigrants, their descendants, and the previous native population changed over time.

If this theory has any real validity it would seem to support my reasoning in my main objection to unrestricted immigration into this country. In my view immigration has slowed the rate of assimilation of African Americans into the general populace by providing alternatives who have been more acceptable in skin color or affect to those who harbor such prejudices.