CFDP 2112

Author(s): Michèle Müller-IttenAniko Öry (Oery)

Publication Date: November 2017

Pages: 42

Abstract: 

We study the evolution of labor force composition when mentoring is more effective within members of the same socio-demographic type. Typically, multiple steady states exist. Some completely exclude juniors of one type. Even a mixed steady state tends to over-represent the type that is dominant in the population. In contrast, the efficient labor force balances talent recruitment against mentoring frictions. It may even underrepresent the dominant type and typically calls for persistent government intervention. This contrasts with the public discourse around temporary affirmative action. We consider specific policy instruments and show that hiring quotas can induce equilibrium employment insecurity.

Keywords: 

Affirmative action, Continuous time overlapping generations, Human capital, Labor participation, Employment insecurity, Mentoring, Talent

JEL Classification Codes: D62, E24, I2, J15, J16, J24

JEL Classification Codes: D62E24J15J16J24