Women Choosing Diverse Workplaces: A Rational Preference with Disturbing Implications for Both Occupational Segregation and Economic Analysis of Law

Abstract:     
Despite women's dramatic labor market gains, there remains a striking degree of occupational segregation by gender. Analysts typically blame discrimination or women's work/family priorities. This Article offers a different explanation.

It is hard for women choosing jobs or occupations to know where they will face discrimination, particularly since recent judicial decisions eliminated certain employer signals that once differentiated fair and discriminatory firms. One way women can effectuate a preference for nondiscriminatory workplaces is by choosing gender-diverse workplaces. Nondiverse workplaces often are not female-friendly, and discrimination may be the reason they are nondiverse. In economic terms, women rationally use level of diversity as a proxy for discrimination, since the latter is harder to observe.

When a preference for diversity is incorporated into standard labor-economic analyses, it generates a bleak prediction: women's preferences for diversity can yield enduring segregation, even in nondiscriminatory workplaces, and even as more women enter the labor force. Title VII has reduced discrimination and raised female labor force participation, but neither of these successes may reduce segregation.

Normatively, although this Article could be interpreted to support a "conservative" argument to narrow Title VII liability (because a workplace underrepresentation of women may reflect women's own choices rather than discrimination), it more forcefully supports a contrary "liberal" argument: to redress segregation, we must go beyond just fighting actual discrimination. Advisable measures include changes to the focus and burdens of proof in Title VII cases, affirmative action, and education reform.

More theoretically, certain standard economic tenets, such as fixed exogenous preferences and the Coase Theorem, are undercut by key features of these models (e.g., endogenous labor supply preferences, path-dependent market evolution, and multiple equilibria). We cannot assume that such markets, left unregulated, are efficient, so the case for labor market intervention is much stronger than economics typically recognizes.

Keywords: Economics, endogenous preferences, feminist theory, civil rights, women's rights

Accepted Paper Series