Do Jobseekers Value Diversity Information? A Mixed Methods Investigation

Summary

The research paper, "Do Jobseekers Value Diversity Information? Evidence from a Field Experiment and Human Capital Disclosures," investigates how information regarding a potential employer's workforce diversity impacts individuals' job-seeking behaviors and whether jobseeker preferences influence corporate disclosure decisions. To address this, the authors conducted a large-scale field experiment embedded within job recommendation emails sent by a prominent U.S. career advice agency, involving 267,494 unique jobseekers. The experimental design involved highlighting a diversity metric to a subset of these jobseekers, allowing the researchers to observe the causal effect of diversity information on their choices. Additionally, a follow-up survey was administered to jobseekers to delve deeper into the reasons behind their valuation of diversity information. Finally, the study extended its scope to analyze how jobseekers' preferences for diversity relate to firms' voluntary human capital disclosure (HCD) choices under the U.S. SEC's disclosure requirements. The findings reveal that disclosing diversity scores in job postings significantly increases the click-through rate of jobseekers, especially for firms with higher diversity scores. This positive effect was found to be more pronounced among female and entry-level jobseekers. Quantifying this valuation, the study estimated that jobseekers update their willingness-to-pay (WTP) for a firm's diversity by $1,463 when confronted with a 10% increase in diversity scores relative to the interquartile range. The follow-up survey indicated that a primary reason workers value diversity information is their belief that diversity is an important social issue, termed the "Preferences" channel. Furthermore, the research observed a strong connection between jobseeker preferences and corporate behavior: firms operating in industries characterized by higher jobseeker responsiveness to diversity information were more likely to voluntarily disclose diversity metrics in their 10-K filings under the new SEC requirements. This suggests that corporate disclosure decisions are, at least partially, a reflection of "jobseeker materiality." The paper provides crucial insights into the demand for diversity information among jobseekers and its subsequent influence on corporate transparency regarding human capital.