Tuesday, July 16, 2013

[obsvjnql] Gender discrimination in hiring

Hypothesis 1: A firm faces a local maximum of productivity in an all-male staff but a global maximum at an equally distributed gender ratio.  This is a radical hypothesis.

The inability to leave the local maximum by incremental changes only is an example of path dependence.

However, in principle, a company can fire all (or half) its employees at once and hire at the global maximum in one fell swoop.

This is a significant restructuring of a company, so practically, there might be a liquidity constraint.  Practically, union contracts and laws protecting them might interfere.  Practically, and ironically, laws preventing gender discrimination (in this case, reverse discrimination), might interfere.  These are solvable problems.

Hypothesis 2: Employers are seeing a great many male candidates who have higher output when working with other men then with otherwise equivalent women, so thus the firm is operating at the global maximum of productivity subject to the constraints of the pool of potential employees.  This points to a much more difficult problem, perhaps the fundamental problem of society.

Inspired by Kim O'Grady.

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