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Affirmative Action in Hierarchies

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Author Info
Suzanne Scotchmer

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Abstract

If promotion in a hierarchy is based on a random signal of ability, rates of promotion will be affected by risk-taking. Further, the numbers and abilities of risk-takers and non-risk-takers will be different at each stage of the hierarchy, and the ratio will be changing. I show that, under mild conditions, more risk-takers than non-risk-takers will survive at early stages, but they will have lower ability. At later stages, this will be reversed: Fewer risk-takers than non-risk-takers survive, but they will have higher ability. I give several interpretations for how these theorems relate to affirmative action, in light of considerable evidence that males are more risk-taking than females.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11213.

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Date of creation: Mar 2005
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Handle: RePEc:nbr:nberwo:11213

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J7 - Labor and Demographic Economics - - Labor Discrimination

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  1. Dekel, Eddie & Scotchmer, Suzanne, 1999. "On the Evolution of Attitudes towards Risk in Winner-Take-All Games," Journal of Economic Theory, Elsevier, vol. 87(1), pages 125-143, July. [Downloadable!] (restricted)
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  2. Milgrom, Paul & Oster, Sharon, 1987. "Job Discrimination, Market Forces, and the Invisibility Hypothesis," The Quarterly Journal of Economics, MIT Press, vol. 102(3), pages 453-76, August. [Downloadable!] (restricted)
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  3. Harry Holzer & David Neumark, 2000. "Assessing Affirmative Action," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 483-568, September. [Downloadable!] (restricted)
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  4. Lundberg, Shelly J, 1991. "The Enforcement of Equal Opportunity Laws under Imperfect Information: Affirmative Action and Alternatives," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 309-26, February. [Downloadable!] (restricted)
  5. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-47, June. [Downloadable!] (restricted)
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  6. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Oxford University Press, vol. 36(4), pages 620-30, October.
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