A lack of similar role models affects both the academic performance of minority students and the labor-market outcomes of workers, requiring persistent affirmative action efforts throughout the professional formation process in order to prevent long-term majority dominance in some fields, according to new research.

For a forthcoming study in the American Economic Journal: Economic Policy, researchers investigated how quality mentorship opportunities for minority students and job seekers could impact workforce composition in the long term. Considering one majority and one minority group, the researchers' findings demonstrate that when workers in the majority compose at least 50% of a labor force, minority-group workers will be steadily underrepresented in the long run without persistent intervention.

According to the researchers, mentorship frictions, whether in the educational sector or in the labor market, inevitably place the minority group at a disadvantage, with young adults discouraged from entering majority-dominated professions that lack similar mentors. Mentoring reduces the initial cost of acquiring human capital but tends to occur more frequently and be most effective when pairing members of the same race, gender or socioeconomic background, according to established literature. For example, women might feel they better identify with senior female mentors than with male mentors; a Hispanic woman might gain more relevant insight from a Hispanic mentor than a white mentor. 

Therefore, when a population majority exists, the researchers said, the steady-state workforce will always be dominated by that group. For firms, then, the most efficient use of resources would be to prioritize mentorship opportunities for majority-group workers when differences in talent are less pronounced and the number of potential mentors available is small. Including even a small number of highly talented individuals from the minority group would diminish available resources for the majority group and decrease efficiency, meaning that the most efficient labor force further excludes the minority. This suggests that existing hurdles to labor-market access result in wasted talent from within the minority group.

Combining perspectives from existing literature on mentorship and talent recruitment, Michèle Müller-Itten, an assistant professor of economics at the University of Notre Dame, and Aniko Öry, an associate professor of marketing at the Yale School of Management, took a novel approach to determining whether policy-based interventions can improve long-term labor market efficiency while still incorporating lost minority-group talent and, if so, which measures are more effective.

"It doesn't require a keen eye to notice that diversity is lacking in both our classrooms and seminar rooms," Müller-Itten told The Academic Times. "That begs the question of why we have arrived here and whether there is anything that could — or should — be done to change it."

One possible means of addressing this issue is to offer affirmative action policies such as recruitment quotas and scholarships, but the researchers warn that actions undertaken solely to correct historical discrepancies and injustices will be insufficient to transform the labor force into one that is truly balanced, or at least more inclusive. 

What is actually needed are policies designed to make the workforce more diverse than the general population, with a lower net cost of education for minorities. To this end, the researchers argue for more readily available minority scholarships and improved mentorship programs for minority workers, rather than the more traditional affirmative action approach to fair representation through hiring quotas.

"What we find is that the optimal policy actively pursues minority candidates, to a degree that goes further than this notion of fairness, and never becomes obsolete. That's kind of radical — especially for a model that's set up purely to maximize efficiency," Müller-Itten said. "I think what the model taught me is to view the entire debate from a different angle: We often frame affirmative action almost as some type of charity. In the model, however, mentoring is a skill that actively lowers the educational hurdles for the next generations."

Regardless of the intent behind affirmative action policies, some have voiced concerns that diversity-enhancing efforts are counterproductive from an economic and societal perspective, reinforcing dangerous stereotypes, lowering industry standards and undermining individual workers' drive to succeed. Müller-Itten said her analysis proposes a more positive point of view — one that highlights the unique contributions often made by minority-group workers to future talent recruitment, which benefits the economy as a whole.

"All of this is not to say that ethics and fairness should be disregarded when we talk about affirmative action. But I think that the model is a great reminder that until mentorship really is just as effective across gender and racial lines, minority mentors add an outsize contribution to a discipline's overall talent recruitment effort, and rewarding them for it is not charity — it's just good economic sense," Müller-Itten said.

The study, "Mentoring and the dynamics of affirmative action," forthcoming in the American Economic Journal: Economic Policy, was authored by Michèle Müller-Itten, University of Notre Dame; and Aniko Öry, Yale University.