Publication Date: November 2017
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.
Aﬀirmative action, Continuous time overlapping generations, Human capital, Labor participation, Employment insecurity, Mentoring, Talent
JEL Classification Codes: D62, E24, I2, J15, J16, J24