Diversity in Innovation

75 Pages Posted: 23 Jan 2017 Last revised: 26 Jan 2025

See all articles by Paul A. Gompers

Paul A. Gompers

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Sophie Calder-Wang

University of Pennsylvania - The Wharton School

Date Written: January 2017

Abstract

In this paper we document the patterns of labor market participation by women and ethnic minorities in venture capital firms and as founders of venture capital-backed startups. We show that from 1990-2016 women have been less than 10% of the entrepreneurial and venture capital labor pool, Hispanics have been around 2%, and African Americans have been less than 1%. This is despite the fact that all three groups have much higher representation in education programs that lead to careers in these sectors as well as having higher representation in other highly-compensated professions. Asians, on the other hand, have much higher representation in the venture capital and entrepreneurial sector than their overall percentages in the labor force. We explore potential supply side explanations including both education attainment as well as relevant prior job experience. We also explore the correlation between diversity and state-level variations. Finally, we discuss how these patterns are consistent with homophily-based hiring and homophily-induced information flows about career choices. We end the paper by discussing areas for future research.

Suggested Citation

Gompers, Paul A. and Calder-Wang, Sophie, Diversity in Innovation (January 2017). NBER Working Paper No. w23082, Available at SSRN: https://ssrn.com/abstract=2903783

Paul A. Gompers (Contact Author)

Harvard Business School - Finance Unit ( email )

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Harvard University - Entrepreneurial Management Unit ( email )

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National Bureau of Economic Research (NBER)

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European Corporate Governance Institute (ECGI)

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Sophie Calder-Wang

University of Pennsylvania - The Wharton School ( email )

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Philadelphia, PA 19104-6365
United States

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