Blending in or moving on? Immigrant coworkers, assimilation, and employee turnover

How does the presence of immigrant coworkers shape the likelihood that minority employees stay or leave their jobs? This study uses linked employer–employee administrative data covering the entire Norwegian labor market to investigate how workplace immigrant concentration influences turnover among immigrants and their native-born children. Building on theories of organizational demography, we ask whether working alongside a higher share of immigrant-background coworkers fosters employee retention—consistent with mechanisms of social contact and homophily—or instead prompts workplace exit, as suggested by group threat and competition theories. Our findings reveal that greater representation of immigrant-background coworkers significantly reduces turnover among immigrants, especially when contact occurs within same-skill occupations. The exposure effects reducing the likelihood of workplace exit are also stronger when immigrant-background employees share the same national origin with their minority coworkers and when minorities are better represented among top earners in the organization. For children of immigrants, the effects of coworker composition are weaker, consistent with theories of assimilation and the weakening of ethnic boundaries across generations. Taken together, these results support social contact theories, which claim that a more inclusive work environment and coworker support in more ethnically diverse workplace contexts foster organizational attachment and reduce turnover among immigrant-background minority employees. However, minority employees’ increased retention in organizations with higher immigrant concentration may also reinforce patterns of ethnic workplace segregation.