Deciding Opportunity

Kevin Lewis

March 28, 2024

Occupational Licensing and Minority Participation in Professional Labor Markets
Andrew Sutherland, Matthias Uckert & Felix Vetter
Journal of Accounting Research, forthcoming 


We examine the staggered adoption of additional educational requirements ("150-hour rule") for Certified Public Accountants ("CPAs") to understand the effects of occupational licensing on minority participation in professional labor markets. The 150-hour rule increased the educational requirement for CPAs from 120 to 150 credit hours, effectively adding a fifth year of study. We find a 13% greater entry decline following the requirement's enactment for minority than nonminority CPA candidates. Our analyses of parental income and financial aid availability point to a socioeconomic status channel explaining the differential entry declines. Studying exam passing patterns, professional misconduct, and job postings we find a deterioration, or at best, no change in CPA quality following enactment.

Family-Leave Mandates and Female Labor at U.S. Firms: Evidence from a Trade Shock
Fariha Kamal, Asha Sundaram & Cristina Tello-Trillo
Review of Economics and Statistics, forthcoming 


We examine how the 1993 Family and Medical Leave Act (FMLA) impacts the gender composition at U.S. firms experiencing a negative demand shock. Combining changes in Chinese imports across industries between 2000 and 2003 and a sharp regression discontinuity to identify FMLA status, we find that an increase in import competition decreases the share of female employment, earnings, and promotions at FMLA relative to non-FMLA firms. This effect is driven by women in prime childbearing ages and without college degrees; and is pronounced at firms with all male managers. These results suggest that job-protected leave mandates may exacerbate gender inequalities in response to adverse shocks.

A Hidden Barrier to Diversification? Performance Recognition Penalties for Incumbent Workers in Male-Dominated Occupations
Jirs Meuris & Jennifer Merluzzi
American Sociological Review, forthcoming 


Responding to persistent gender inequity, organizations have adopted diversity initiatives to promote women's representation in traditionally male-dominated occupations. Although studies have identified challenges to these initiatives for women entering occupations, we uncover a performance recognition penalty for incumbent workers originating from the process of occupational diversification. As women incrementally enter a male-dominated occupation, a conflict arises between the changing gender composition at the work-unit level and the masculine "ideal worker" prototype embedded in the occupation. We propose that this conflict will lower the performance expectations of the work unit, decreasing the individual likelihood of performance recognition for each worker in the unit. Using detailed panel data on police officers, we found that an officer's individual likelihood of being nominated for a performance award consistently declined when their police unit proportionately increased in women officers. Both men and women managers enacted this penalty, with men managers penalizing men subordinates more than women subordinates. This pattern remained for awards recognizing exceptional performance, regardless of gender-typing of the unit or its work tasks, and considering officer tenure and attrition from the unit. Our findings offer novel insights into the challenge of diversifying male-dominated occupations.

Re-assessing the Spatial Mismatch Hypothesis
David Card, Jesse Rothstein & Moises Yi
NBER Working Paper, March 2024 


We use detailed location information from the Longitudinal Employer-Household Dynamics (LEHD) database to develop new evidence on the effects of spatial mismatch on the relative earnings of Black workers in large US cities. We classify workplaces by the size of the pay premiums they offer in a two-way fixed effects model, providing a simple metric for defining "good" jobs. We show that: (a) Black workers earn nearly the same average wage premiums as whites; (b) in most cities Black workers live closer to jobs, and closer to good jobs, than do whites; (c) Black workers typically commute shorter distances than whites; and (d) people who commute further earn higher average pay premiums, but the elasticity with respect to distance traveled is slightly lower for Black workers. We conclude that geographic proximity to good jobs is unlikely to be a major source of the racial earnings gaps in major U.S. cities today.

Disparities in Psychological Traits and Income: Race, Ethnicity, and Gender in the U.S.
Aurelie Dariel et al.
NYU Working Paper, February 2024 


There are pronounced racial, ethnic, and gender gaps in income in the U.S. We investigate whether these correspond with differences in competitiveness, risk tolerance, and confidence relative to performance in a large, stratified sample of the U.S. prime-age population. We find substantial differences in all three traits across Black, Hispanic, and White males and females. These traits predict individual income. Competitiveness and risk tolerance help explain the White gender income gap. Competitiveness also affects the Black-White income gap between men. Confidence about one's performance helps explain a substantial and significant portion of all five race-gender income gaps with White men.

Overconfidence and Preferences for Competition
Ernesto Reuben, Paola Sapienza & Luigi Zingales
Journal of Finance, April 2024, Pages 1087-1121 


We study when preferences for competition are a positive economic trait among high earners and the extent to which this trait can explain the gender gap in income among a master's degree in business administration (MBAs). Consistent with the experimental evidence, preferences for competition are a positive economic trait only for individuals who are not overconfident. Preferences for competition correlate with income only at graduation when bonuses are guaranteed and not a function of performance. Overconfident competition-loving MBAs observe lower compensation and income growth, and experience greater exit from high-reward industries and more frequent job interruptions. Preferences for competition do not explain the gender pay gap among MBAs.

Teacher-Student Race Match and Identification for Discretionary Educational Services
Cassandra Hart & Constance Lindsay
American Educational Research Journal, forthcoming 


A host of recent literature suggests benefits to Black children of being matched to same-race teachers. We extend this literature to explore whether being matched to a Black teacher is related to Black students' likelihood of being identified for two types of discretionary educational services in the following academic year: gifted education and special education. While we do not find that access to Black teachers affects students' likelihood of gifted identification, Black students matched to Black teachers are less likely to be identified for special education. The results are strongest for Black boys, particularly those who are also economically disadvantaged and are strongest for disabilities with more discretion in identification.

Seeing is believing: The presence and impact of ambient sexism toward collegiate women in STEM
Elisabeth Silver et al.
Social Psychology, Winter 2023, Pages 372-384 


We investigate how visual cues in universities discourage women from pursuing STEM. We extend research on ambient sexism (i.e., witnessing sexist mistreatment of others) to include environmental cues that women do not belong. Men were pictured in STEM buildings (Pilot Study 1) and described in university-sponsored STEM news articles (Pilot Study 2) twice as often as women. In an experiment, undergraduate women who read about male scientists reported less positive STEM attitudes relative to men who read about male scientists and women who read about female scientists. Women who read about and saw images of female scientists reported more positive STEM attitudes than women who simply read about female scientists. Depicting predominantly male scientists in universities negatively impacts female students.

The (in)visible hand: Do workers discriminate against employers?
Philipp Doerrenberg, Denvil Duncan & Danyang Li
Journal of Public Economics, March 2024 


Although a large literature has studied discrimination in the labor market, there is little evidence on sex- and race-based discrimination of workers against (potential) employers. We implement a randomized experiment in an online labor market to contribute to this gap in the literature. In our experiment, workers make labor-supply decisions after we randomly expose them to signals about the race and sex of the employer. Our empirical analysis provides fairly strong evidence that workers discriminate against black employers when making labor effort decisions. Race-based discrimination is driven primarily by white workers against black male employers. We find weaker and less conclusive evidence of a favorable sex gap toward female employers. An additional survey with randomized components suggests that perceived differences in the likelihood that an employer honors the labor contract does not differ by employer race or sex.

Deep learning models reveal replicable, generalizable, and behaviorally relevant sex differences in human functional brain organization
Srikanth Ryali et al.
Proceedings of the National Academy of Sciences, 27 February 2024 


Sex plays a crucial role in human brain development, aging, and the manifestation of psychiatric and neurological disorders. However, our understanding of sex differences in human functional brain organization and their behavioral consequences has been hindered by inconsistent findings and a lack of replication. Here, we address these challenges using a spatiotemporal deep neural network (stDNN) model to uncover latent functional brain dynamics that distinguish male and female brains. Our stDNN model accurately differentiated male and female brains, demonstrating consistently high cross-validation accuracy (>90%), replicability, and generalizability across multisession data from the same individuals and three independent cohorts (N ~ 1,500 young adults aged 20 to 35). Explainable AI (XAI) analysis revealed that brain features associated with the default mode network, striatum, and limbic network consistently exhibited significant sex differences (effect sizes > 1.5) across sessions and independent cohorts. Furthermore, XAI-derived brain features accurately predicted sex-specific cognitive profiles, a finding that was also independently replicated. Our results demonstrate that sex differences in functional brain dynamics are not only highly replicable and generalizable but also behaviorally relevant, challenging the notion of a continuum in male-female brain organization. Our findings underscore the crucial role of sex as a biological determinant in human brain organization, have significant implications for developing personalized sex-specific biomarkers in psychiatric and neurological disorders, and provide innovative AI-based computational tools for future research.

Discrimination announcements, employee opinion, and capital structure: Evidence from the EEOC
Spencer Barnes
Financial Review, forthcoming 


This paper investigates the impact of discrimination publicity on employee opinion. The findings suggest that employees reduce their sentiments toward the firm and its leaders when discrimination becomes public via Equal Employment Opportunity Commission (EEOC) announcements. Following the stakeholder theory of capital structure, the effect clusters in firms with above-average leverage. Additionally, discrimination announcements increase accruals and the E index, reinforcing a culture of negative management at the firm. These results suggest that human capital risk plays a vital role in employee reactions to discrimination announcements.


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