key topic

Diversity in the workplace

Equality and diversity policies exist to ensure that employers create an inclusive workplace where differences in gender, race/ethnicity, sexual orientation, age, physical appearance, and disability are never an obstacle to getting a job or career progression. Companies which create inclusive workplaces and environments that encourage success among all employees often outperform their competitors. Yet, many companies still prefer homogeneous teams and discriminate against certain population groups. So, what are the implications of diversity and how can firms and policymakers encourage a diverse workplace?
 

  • Gender diversity in teams Updated

    Greater representation of women may better represent women’s preferences but may not help economic performance

    Ghazala Azmat, May 2019
    Women's representation on corporate boards, political committees, and other decision-making teams is increasing, this is in part because of legal mandates. Evidence on team dynamics and gender differences in preferences (for example, risk-taking behavior, taste for competition, prosocial behavior) shows how gender composition influences group decision-making and subsequent performance. This works through channels such as investment decisions, internal management, corporate governance, and social responsibility.
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  • Do anti-discrimination policies work?

    A mix of policies could be the solution to reducing discrimination in the labor market

    Marie-Anne Valfort, May 2018
    Discrimination is a complex, multi-factor phenomenon. Evidence shows widespread discrimination on various grounds, including ethnic origin, sexual orientation, gender identity, religion or beliefs, disability, being over 55 years old, or being a woman. Combating discrimination requires combining the strengths of a range of anti-discrimination policies while also addressing their weaknesses. In particular, policymakers should thoroughly address prejudice (taste-based discrimination), stereotypes (statistical discrimination), cognitive biases, and attention-based discrimination.
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  • Economic effects of differences in dialect

    Dialects show regional cultural variation, making the idea of standardized national labor markets misleading

    Jens Suedekum, January 2018
    Countries are not perfectly integrated market areas. Even if institutional differences are much smaller within than between countries, there are persistent local cultural differences. These differences act as barriers that reduce economic exchange: bilateral migration, trade, and knowledge diffusion flows are smaller, and individuals discriminate against unfamiliar dialects. They also act as natural limits to the degree of integration of a labor market, and they cannot (and perhaps should not) be easily affected by policy. Local dialects, shaped over centuries, provide a unique opportunity to measure these barriers.
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  • Trans people, well-being, and labor market outcomes

    Transitioning across gender is related to greater life and job satisfaction but also affects acceptance in one’s society

    Nick Drydakis, September 2017
    Acceptance of one’s gender identity and congruence between one’s gender identity and outward appearance are associated with less adverse mental health symptoms, and greater life and job satisfaction. However, trans people are subject to human rights violations, hate crimes, and experience higher unemployment and poverty than the general population. Trans people often feel that they are citizens who are not allowed to be themselves and practice their authentic identity. Many biased treatments of trans people could be attenuated if legal protections and inclusive workplace practices were in place.
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  • Can diversity encourage entrepreneurship in transition economies?

    Harnessing the benefits of diversity is essential for encouraging entrepreneurship in the transition region

    Elena Nikolova, May 2017
    Entrepreneurship is an important lever for spurring transition in the economies of the former Soviet Union and Central and Eastern Europe. Utilizing diversity, in terms of religion or gender, can positively affect entrepreneurial development. Programs that encourage entrepreneurial initiatives (such as business start-ups) in culturally diverse localities should rank high on the policy agenda. Prompting women to start a business, along with female-friendly measures (including targeted legislation), can positively affect entrepreneurial behaviour and the performance of existing enterprises.
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  • Gender wage discrimination

    Does the extent of competition in labor markets explain why female workers are paid less than men?

    Boris Hirsch, November 2016
    There are pronounced and persistent wage differences between men and women in all parts of the world. A significant element of these wage disparities can be attributed to differences in worker and workplace characteristics, which are likely to mirror differences in worker productivity. However, a large part of these differences remains unexplained, and it is common to attribute them to discrimination by the employer that is rooted in prejudice against female workers. Yet recent empirical evidence suggests that, to a large extent, the gaps reflect “monopsonistic” wage discrimination—that is, employers exploiting their wage-setting power over women—rather than any sort of prejudice.
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