Workplace Diversity and Firm Productivity in New Zealand
In many countries, the workforce is becoming more diverse. Migration, shifting population composition and changing gender norms have altered who is in the workforce and how workplaces are organised. New Zealand is a clear example. It has a high share of foreign-born workers, an ethnically diverse population, a high female labour force participation rate, and comparatively flexible labour market institutions. These features raise an important question: does workforce diversity support firm performance? We draw on linked employer–employee microdata to estimate firm-level productivity and examine its relationship with gender and ethnic diversity. We find both ethnic and gender diversity are positively related to firm productivity. The magnitudes are economically meaningful and sit toward the upper end of those reported in the international literature.