periods, we estimate that the retention probability is reduced by about 1.1 percentage points, which is a drop of 1.8% relative to the sample mean. In contrast, for white incumbent workers, we do not find significant retention effects in any post-event year. In summary, the death of a non-white worker – relative to the death of a white worker – is found to reduce the retention of non-white incumbents but does not affect the retention of white incumbents.<sup>15</sup> The effects of a change in the racial coworker composition do not appear symmetric across racial groups, which is consistent with recent evidence from Linos _et al._ (2024).

**Quantification.** To facilitate the quantitative interpretation of our main results and to compare them to previous studies, we scale our estimates by the reduction in the non-white coworker share that incumbents experience due to the death of a non-white vs. white worker. For that, we first re-estimate model (1) using as the dependent variable the (leave-out) non-white share of an incumbent’s coworkers in the initial peer group. Compared to the results at the peer group level described in Section 3.3, which give equal weight to small and large peer groups, this incumbent-level estimation provides us with an estimate of the effect that is representative across incumbents. As shown in Appendix Figure A.4, losing one non-white vs. white worker reduces the non-white share of incumbents’ coworkers by about 6.8 percentage points on average over the three years after the death. The effect size is the same for non-white and white incumbents. Thus, our results imply that a 10 percentage point increase in the non-white share would increase the retention of non-white workers by about 1.6 percentage points. The retention of white workers, in contrast, is not significantly affected by the non-white share.

Our estimated retention effects for non-whites are somewhat smaller in magnitude compared to most of the existing workplace demography literature.<sup>16</sup> We interpret this finding as plausible since we capture a wide range of workers throughout different sectors, occupations, and skill levels in Brazil, whereas the existing evidence mainly comes from a small set of firms, in particular large and high-paying firms in the United States. Studies of low-wage workers and more representative samples of firms tend to find smaller effect sizes.<sup>17</sup>

**Labor supply vs. labor demand responses.** In Figure 4, we show that the retention effects

> 15In Appendix Table A.3, we show that the effects on non-white and white incumbents are significantly different from each other.

> 16Linos _et al._ (2024) find that a 10 percentage point increase in the share of white coworkers leads to a 4.6 percentage point increase in the probability of black workers leaving the firm two years after hiring. Zatzick _et al._ (2003) find that a 10 percentage point increase in the proportion of same-race coworkers is related to a decrease in voluntary turnover rates by 7.4%. Sørensen (2004) finds that one additional coworker of the same race correlates with a 3.5% lower probability of new hires voluntarily separating from the firm.

> 17In a sample of part-time, unskilled workers in a U.S. service firm, Leonard and Levine (2006) find that a 10 percentage points higher share of same-race coworkers is related to a 0.8 percentage point lower turnover rate. Within a representative sample of West German manufacturing firms, Hirsch _et al._ (2020) find a 2.2% increase in the job-to-job turnover rate for a 10 percentage point higher share of same-nationality coworkers.

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