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 that 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 a lack of diversity and how can firms and policymakers encourage a diverse workplace?
-
Gender quotas on corporate boards of directors Updated
Gender quotas for women on boards of directors improve female share on boards, but firm performance effects are mixed, and spillover effects are positive but small.
Nina SmithEmma Von Essen, May 2025Arguments for increasing gender diversity on corporate boards of directors by gender quotas range from ensuring equal opportunity to improving firm performance. The introduction of gender quotas in a number of countries, mainly in Europe, has increased female representation on boards. Current research does not unambiguously justify gender quotas on grounds of economic efficiency. In many countries, the number of women in top executive positions is limited, and it is not clear from the evidence that quotas lead to a larger pool of female top executives, who, in turn, are the main pipeline for boards of directors. Thus, other supplementary policies may be necessary if politicians want to increase the number of women in senior management positions.
-
Disability and labor market outcomes Updated
Disability is associated with labor market disadvantage; evidence points to this being a causal relationship
Melanie Jones, March 2021In Europe, about one in eight people of working age report having a disability; that is, a long-term limiting health condition. Despite the introduction of a range of legislative and policy initiatives designed to eliminate discrimination and facilitate retention of and entry into work, disability is associated with substantial and enduring labor market disadvantage in many countries. Identifying the reasons for this is complex, but critical to determine effective policy solutions that reduce the extent, and social and economic costs, of disability-related disadvantage.MoreLess -
The value of language skills Updated
A common language facilitates communication and economic efficiency, but linguistic diversity has economic and cultural value too
Gilles GrenierWeiguo Zhang, March 2021In today's globalized world, people are increasingly mobile and often need to communicate across different languages. Learning a new language is an investment in human capital. Migrants must learn the language of their destination country, but even non-migrants must often learn other languages if their work involves communicating with foreigners. Economic studies have shown that fluency in a dominant language is important to economic success and increases economic efficiency. However, maintaining linguistic diversity also has value since language is also an expression of people's culture.MoreLess -
Racial wage differentials in developed countries Updated
The variation of racial wage gaps across and within groups requires differing policy solutions
Simonetta Longhi, October 2020In many developed countries, racial and ethnic minorities are paid, on average, less than the native white majority. While racial wage differentials are partly the result of immigration, they also persist for racial minorities of second and further generations. Eliminating racial wage differentials and promoting equal opportunities among citizens with different racial backgrounds is an important social policy goal. Inequalities resulting from differences in opportunities lead to a waste of talent for those who cannot reach their potential and to a waste of resources if some people cannot contribute fully to society.MoreLess -
Sexual orientation and labor market outcomes Updated
Sexual orientation seems to affect job access and satisfaction, earning prospects, and interaction with colleagues
Nick Drydakis, July 2019Studies from countries with laws against discrimination on the basis of sexual orientation suggest that gay and lesbian employees report more incidents of harassment and are more likely to report experiencing unfair treatment in the labor market than are heterosexual employees. Both gay men and lesbians tend to be less satisfied with their jobs than their heterosexual counterparts. Gay men are found to earn less than comparably skilled and experienced heterosexual men. For lesbians, the patterns are ambiguous: in some countries they have been found to earn less than their heterosexual counterparts, while in others they earn the same or more.MoreLess -
Gender diversity in teams Updated
Greater representation of women may better represent women’s preferences but may not help economic performance
Ghazala Azmat, May 2019Women'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.MoreLess