The Self-Limiting Dynamics of Affirmative Action

Despite gains in female representation in early career stages, large gender gaps persist at the higher ends of the income distribution. This paper uses an experiment to study how the dynamics of affirmative action may limit the extent to which its initial benefits extend throughout the career track. Specifically, by manipulating the presence of affirmative action in an initial competitive environment, I test how the presence of affirmative action affects the strength of the signal about a woman’s ability when she is successful and thus the likelihood of her being hired in a later employment stage. Consistent with the hypotheses from a simple theoretical framework of employee tournament entry and employer hiring decisions, I find that qualified women are significantly less likely to be hired when those qualifications were gained in the presence of affirmative action. Additionally, I find empirical support that this decrease in hiring comes through employer beliefs about the ability of these previously successful women, explaining over 56% of the hiring difference. Using a simulation I demonstrate the impact of these dynamics, finding that while affirmative action has a net positive effect for women in this experiment due to increasing the number of women who enter and are successful in the first competitive stage, the gains in women’s representation would be three times larger if the dynamic impact on subsequent employer hiring behavior could be mitigated