The Civil Rights Act of 1991 (CRA91) was enacted after a rancorous debate about whether it was a "quota" hiring bill or a necessary means of opening labor markets. We analyze the effects of CRA91 on the composition of firms' workforces. We consider employer behavior when firms vary in their...

We develop a model linking maximum damage awards available to plaintiffs in wrongful termination lawsuits, workers' propensity to sue as a function of experience, and returns to experience. Using Equal Employment Opportunity Commission data on protected-worker discrimination complaints and...

Drawing on insights from corporate finance and personnel economics, we show that firms consider potential employees using a real options approach, much as they do when making other types of capital investment decisions. Theoretically we find that firms’ hiring decisions are influenced by the...