Wages and diversity : evidence from minority MBA job officers

Abstract

In this thesis, I develop a model for the economic impact of corporate ethnic diversity, and for the relationship between firm diversity and compensation offered to minority workers. I construct a sample of information from a survey of job offers made to graduating African-American MBAs that specifically exploits the presence of individuals with multiple job offers. Only by correcting for the quality of the candidate, can genuine inter-firm comparisons be made. Empirical testing of the data indicates a positive relationship between compensation and the career aspects of diversity (minority retention and promotion) and a negative one for the social, environmental components. This result suggests that diversity initiatives have heterogeneous impacts. While some policies are closely associated with providing worker utility (and thus appearing as a compensating differential), other policies (e.g., those which impact overall career paths) may be associated with increased productivity on the part of minority recruits.