Diversity in the Workplace

October 1, 2006

Preview Citation

Format: Chicago

Felix J Vardy, and John Morgan. Diversity in the Workplace, (USA: International Monetary Fund, 2006) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Labor, Labor force, Labor markets, Population and demographics, Unemployment, Unemployment rate

Keywords: Decision problem, Discourse systems, Diversity, Europe, Labor force, Labor markets, Lower bound, Majority candidate, Minority candidate, Optimization problem, Reverse discrimination, Sequential search, Statistical discrimination, Unemployment, Unemployment rate, West Africa, Workplace diversity, WP

Publication Details

Pages:

45
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/237
Stock No:

WPIEA2006237
ISBN:

9781451864977
ISSN:

1018-5941

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