Team Productivity of Immigrants and Natives in Peru

Abstract

This project will study team productivity between Venezuelan immigrants and natives in Peru. The experimental design will separately identify the impact of cultural differences and prejudice on team productivity.  The project will leverage an existing partnership with the Ministry of Labor in Peru and a virtual platform designed to measure teamwork abilities and group dynamics using games and simple tasks for the implementation of the experiment. The results will provide insights into the integration of immigrants in local labor markets and how interactions in the workplace can affect immigrants’ job opportunities and career progression.

Background

Existing empirical evidence documents that immigrants struggle in the labor market (Lubotsky, 2007). For instance, a recent study in Canada shows that immigrants face discrimination in the labor market as job applicants with foreign experience or immigrant names receive lower calls back from potential employers (Oreopoulos, 2011). One potential source of discrimination is immigrants’ interactions with coworkers in the workplace. While most discrimination studies in the labor market of immigrants have focused on recruitment, it is less explored how immigrants and natives interact when they work in teams.

Understanding team productivity between natives and immigrants is particularly relevant in current labor markets. Recent studies highlight the growing importance of teams as employers have a higher demand for social skills. For instance, during the last forty years, occupations requiring high levels of social skills have increased by 12 percentage points in the total share of the US labor force (Deming, 2017). Latin America has also experienced this phenomenon. A recent study in Peru shows that social skills such as teamwork and leadership, although scarce to find in job applicants, are among the most demanded abilities by firms (Novella et al., 2019).

In team environments, other factors beyond individuals’ abilities can affect productivity. For example, national-diverse teams may have difficulty communicating due to cultural differences, and these struggles can reduce performance (Lyons, 2017). Likewise, prejudice and discrimination from coworkers can decrease the production levels of a team. Existing evidence from Kenya shows that inter-ethnic teams are less productive and that these effects are more pronounced in conflict periods (Hjort, 2014). As this phenomenon is explained by taste-based discrimination, prejudice from coworkers can affect the team productivity of immigrants in host countries.

In this project, I will study the team productivity of immigrants and natives in the labor market of Peru. My experimental design aims to separately identify the impact of cultural differences and prejudice on team productivity. To do so, I will leverage an existing partnership with the Ministry of Labor of Peru, where we are using a virtual platform to study team productivity and measure social skills. The platform includes a series of tasks that we selected based on previous studies measuring team productivity (Woolley et al., 2010) and individuals’ teamwork abilities (Weidmann and Deming, 2020). While this project will shed light on the challenges that immigrants face in labor markets in Peru, the results can be helpful to understand how cultural differences and prejudice can affect the workplace interactions of immigrants in other countries. Furthermore, as we developed the platform for research purposes, I expect to run similar experiments in different contexts.

Research Design

The experimental design is geared to measure how immigrants and natives interact in teams. It also aims to identify the impact of cultural differences and discrimination on performance. The design is structured into two phases. In the first phase, participants would be randomly assigned to a type of team member. Conditional on the participant’s type (immigrant or native), they can be assigned either to a single-type team (with teammates of their same type) or a mixed team (with teammates of the other type). This allocation will produce three types of teams: (i) all members are immigrants; (ii) half of the members are immigrants and half natives; (iii) all members are natives.

The second phase of the experimental design aims to disentangle cultural differences from prejudice by hiding and revealing information from team members. In particular, we will reveal participants’ country or region of birth in some teams but hide this information in others.

Hypotheses

The research questions this proposal aims to answer are: (i) are immigrants and natives’ teams more or less productive than single-origin teams? and (ii) do cultural differences or prejudice explain these differences in productivity?

I will estimate the following equation for immigrants and natives separately:
y_ig=α+β mixed_ig+δ info_g+γ mixed_ig* info_g+X_ig^’ Γ+ε_ig, (1)

where y_ig is the outcome variable of individual i in group g (the performance of the group, the score given by other teammates in leadership and teamwork abilities), mixed_ig is a dummy variable equal to one when group g is a mixed team (assigned to the other-type participants), info_g is a dummy variable equal to one when the origin of the team members is revealed, X_ig^’is a vector of individual characteristics selected to improve precision and control for unbalanced characteristics, and ε_ig is an error term.

The parameters of interest in this equation are β and γ. The parameter β shows the difference in productivity for mixed versus single-type teams for natives and immigrants. The parameter γ shows the differential effect of information on team composition. The parameter δ is also of interest as individuals may react differently when they learn that their team members are also their type. However, our focus is on this differential effect for the mixed teams. For instance, equation 1 will allow us to identify whether the recognition of immigrants’ leadership abilities is lower in the mixed teams than in all-immigrant teams just because other natives learn that a participant is an immigrant.