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Diversity in the Workplace
Author:
Mr. Felix J Vardy
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Mr. John Morgan
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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 237
Language:
English
Publication Date:
01 Oct 2006
DOI:
https://doi.org/10.5089/9781451864977.001
ISBN:
9781451864977
ISSN:
1018-5941
Pages:
45
Keywords:
WP; lower bound; Diversity; sequential search; statistical discrimination; reverse discrimination; discourse systems; minority candidate; majority candidate; decision problem; optimization problem; workplace diversity; Labor force; Unemployment; Unemployment rate; Labor markets; Europe; West Africa
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We study a model where an employer, trying to fill a vacancy, engages in optimal sequential search by drawing from two subpopulations of candidates who differ in their "discourse systems": during an interview, a minority candidate with a discourse system not shared with the employer conveys a noisier unbiased signal of ability than does a majority candidate. We show that, when the employer is "selective," minority candidates are underrepresented in the permanent workforce, fired at greater rates, and underrepresented among initial hires, even though the employer has no taste for discrimination and the populations are alike in their average ability. Furthermore, workplace diversity is increased if: (1) the cost of firing is reduced, (2) the cost of interviewing is increased, (3) the opportunity cost of leaving the position unfilled is increased, or (4) the prior probability that a candidate can perform the job is increased. Indeed, if the prior probability is sufficiently high, or the cost of firing sufficiently low, then minority candidates may be overrepresented in the permanent workforce.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund