Diversity & Productivity: Evidence from Florida Hospitals

This study assesses whether ethnic diversity within a team of physicians impacts patient mortality. Ethnic diversity in work settings has been hypothesized to have two opposite effects. It could worsen outcomes because different backgrounds/perspectives can foster disagreement, or it could improve outcomes because adding additional perspectives can increase the chance of finding the best solution to a problem. Ultimately, the effect of diversity is an empirical question. We address this question by considering hospital patients in Florida with both an attending and operating physician. We then compare the inpatient mortality rates of those who are quasi-randomly assigned to an ethnically homogeneous vs. ethnically heterogeneous team of physicians. Using rich administrative data and an instrumental variables approach, we find that ethnic diversity within a medical team reduces the likelihood of patient mortality by roughly one percentage-point.