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Underrepresentation, Quotas and Quality: A dynamic argument for reform

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  • Arve, Malin

    (Department of Business and Management Science, Norwegian School of Economics)

  • Valasek, Justin

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

The trade-off between increased representation and perceived quality is central to the debate on how to address underrepresentation in high-profile professions. We address this trade-off using a dynamic model of career selection where juniors value both the identity and perceived quality of their mentors (seniors). A preference for homophily results in the persistence of underrepresentation, suggesting intervention is needed. However, if an abrupt quota causes a large decrease in the perceived quality of underrepresented seniors, then underrepresented juniors of high talent will select out of the profession, causing a permanent (real) quality difference. Encouragingly, we show that gradual reform—while decreasing perceived quality in the short term—enables a transition to equal representation and equal quality in the long term. We discuss the implications of our analysis for commonly-used measures to increase representation.

Suggested Citation

  • Arve, Malin & Valasek, Justin, 2023. "Underrepresentation, Quotas and Quality: A dynamic argument for reform," Discussion Paper Series in Economics 8/2023, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2023_008
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    References listed on IDEAS

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    More about this item

    Keywords

    Affirmative Action; Quotas; Mentorship; Identity; Gender; Adverse Selection.;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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