This paper studies the impact of working with same-race coworkers on individuals’ retention at firms. Using administrative employer-employee data from Brazil, the paper exploits unexpected deaths of workers from different racial groups as exogenous shocks to peer group composition. The findings show that a decrease in the non-white share of coworkers reduces the retention of non-white workers but does not affect the retention of white workers. The effects are driven by non-whites quitting and moving to new jobs with more peers of the same race than in their old jobs. The findings highlight how peer dynamics can contribute to racial segregation across workplaces.
