Diversity in firms: Start with managers

The common wisdom is that diversity starts at the lowest levels of the company: hire junior employees and they will reach the top positions of the firm. A gradual influx of female, African American, Hispanic, etc. hires will change the composition of the workforce in the long run. The firm will adapt to the new conditions and the existing management structure will be preserved without the need for major structural changes in the company.

Research suggests that this is not happening that easily. All evidence shows that women & minorities have a hard time in these companies. Women drop out massively at the middle-management level; minority CEOs are a still underrepresented (just have a quick look at SEC filings or the Execucomp dataset).

A recent paper in the Journal of Labor Economics, “Manager Race and the Race of New Hires” shows that the whole career of an employee is affected by his/her race. Managers tend (i) to recruit hires of their own race (ii) tend to promote and dismiss differently employees of different races (iii) tend to hire people who live closer to their neighborhood (within a given firm).

Laura Giuliano & David I. Levine & Jonathan Leonard, 2009.
“Manager Race and the Race of New Hires,” Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 589-631, October.

Political competition enhances the quantity and the quality of female legislators (VoxEu)

At VoxEu, by Berta Esteve-Volart (York University Toronto) and Manuel Bagues (Carlos III Madrid),

As women are underrepresented amongst legislators, many governments impose gender quotas on candidate lists. This column examines Spain’s elections and argues that its political parties evade the quota. It claims that parties use female candidates as pawns chosen according to how their presence in the list would affect gender statistics and male candidates’ possibilities of success.

School spending and academic achievement

Apparently, Paul Krugman believes that school resources have an effect on student achievement:

• New York Times column

But academic research since the 1960s has proved otherwise:

• Erik Hanushek, The Failure of Input-Based Schooling Policy, The Economic Journal 113 (February).

And even the Daily show knows that:

• Blog post

 

Edward Glaeser on poverty in cities

In his latest NBER working paper, The Wealth of Cities:

the urban emphasis on mobility implies that local poverty is more likely to reflect something good that an area is providing for the poor than a failure in local labor markets.  Poor people are attracted to big cities because they offer access to public transportation and inexpensive rental housing.  Further attempts to improve the lives of poor people will tend to attract more poor people to places where other low-income people live.

What I’m up to these days

It’s August 7, 2009, and I’m at the London School of Economics, the weather is kind of awful, and I’m looking forward to spending the weekend jogging in Islington, watching a dance show at Sadler’s Wells, and in my favorite low-key Turkish restaurant — called Gem — in Islington.

The summer is a fruitful time for research, playing with data, interacting with people, confronting ideas, and be clearer about the big picture. So here are some of my current research interests:

• Womenomics. Why don’t companies have more high-level female executives? How does women’s traditional involvement in the household affect their professional career? Why are companies losing so many talented women at the junior and middle management levels?
• The non-economic consequences of the real estate bubble.
• Do students think that their teachers are prejudiced? A field experiment in the classroom with 20 schools across England.

Enough to keep me busy for a good chunk of the summer!

Business School Economists

In Greg Mankiw’s Blog, “economists of a more practical and empirical frame of mind will gravitate toward business schools, where their practicality is valued and the salaries are typically higher.”

Teachers’ Racial and Gender Biases

I’m featured in CentrePiece magazine, the Education edition.

Econometrics for Court Cases

An interesting paper on the Econometrics of Cartels. After the Chicago Economics & Law movement, a new field is emerging, with practical applications in business.

David Spector, Antoine Chapsal, What can be learnt from econometric studies in cartel cases?, Concurrences, N° 1-2009, n°23334, pp. 42-45

Partial Identification

Partial identification has been developed by Charles Manski as a way to identify effects without making strong assumptions about the effect of unobservables — the biggest problem in econometrics.

When using data people typically add their own assumptions — which cannot come from the dataset itself. Partial identification clearly separates what comes from the data and what comes from the researcher’s mind. And traditional analysis of data typically uses a lot of assumptions. Manski shows what happens when no assumption is used — sometimes it’s surprisingly informative — and when some weak assumptions are used — and sometimes it’s also surprisingly informative.

Applications are numerous: from the  effect of missing data to the estimation of causal effects without random allocation of the treatment.

There is a set of Stata programs on the website of Charles Manski. People interested in understanding partial identification should look at Manski and Pepper (2000), his book Identification Problems in the Social Sciences. An outlook on Manski’s analysis of identification for decision is described in his latest book.

The March edition of the American Economic Review: Peer effects, diversity in the workplace, women and mobility

Peers at Work (pp. 112-45)
Alexandre Mas and Enrico Moretti

Women, Wealth, and Mobility (pp. 146-78)
Lena Edlund and Wojciech Kopczuk

Class-Size Caps, Sorting, and the Regression-Discontinuity Design (pp. 179-215)
Miguel Urquiola and Eric Verhoogen

The Value of Groups (pp. 295-323)
Shaun P. Hargreaves Heap and Daniel John Zizzo

Group Identity and Social Preferences (pp. 431-57)
Yan Chen and Sherry Xin Li

Diversity in the Workplace (pp. 472-85)
John Morgan and Felix Várdy