Do Jobseekers Value Diversity Information? Evidence from a Field Experiment and Human Capital Disclosures

• Published date: 01 June 2023
• Author: JUNG HO CHOI,JOSEPH PACELLI,KRISTINA M. RENNEKAMP,SORABH TOMAR
• Date: 01 June 2023
• DOI: http://doi.org/10.1111/1475-679X.12474

DOI: 10.1111/1475-679X.12474

Journal of Accounting Research

Vol. 61 No. 3 June 2023

Printed in U.S.A.

Do Jobseekers Value Diversity

Information? Evidence from a Field

Experiment and Human Capital

Disclosures

JUNG HO CHOI ,∗JOSEPH PACELLI,†

KRISTINA M. RENNEKAMP,‡AND SORABH TOMAR§

Received 1 December 2021; accepted 3 January 2023

ABSTRACT

We examine how information about the diversity of a potential employer’s

workforce affects individuals’ job-seeking behavior. We embed a field experi-

ment in job recommendation emails from a leading career advice agency in

the United States. The experimental treatment involves highlighting a diver-

sity metric to jobseekers. Our results indicate that disclosing diversity scores

∗Stanford Graduate School of Business; †Harvard Business School; ‡Cornell University;

§Southern Methodist University

*Accepted by Luzi Hail. We thank Susan Athey, Phil Berger, Mary Ellen Carter (discus-

sant), Hemang Desai, Paul Healy, Maureen McNichols, Alex Nekrasov,Joe Piotroski, George

Serafeim, Amit Seru, Kathryn Shaw, Lisa Simon, Sarah Soule, and workshop participants at

Stanford GSB, the University of Illinois-Chicago, Southern Methodist University, the 2022

Utah Winter Accounting Conference, the 2022 JAR Conference, the 2022 SOLE Confer-

ence, the Labor Market Information Meeting, and the 5th IDSC of IZA Workshop for their

comments on the paper. We thank Henry Shao, Chris Kolmar, Javier Lopez-Cozar, and

Ray Townsend at Zippia for allowing us to conduct this field experiment on its platform

(www.Zippia.com/about-us). We thank Stanford GSB’s Data, Analytics, and Research Com-

puting (DARC) team for superb hands-on support, and we thank Sarah McDonald, Fiona

Sequeira, and Jisang (Eddie) Yu for excellent research assistance. The paper’s AEA RCT reg-

istry number is AEARCTR-0008009. IRB approval was obtained from Stanford University. The

authors declare that they have no relevant or material financial interests that relate to the

research described in this paper. An online appendix to this paper can be downloaded at

https://www.chicagobooth.edu/jar-online-supplements.

695

© 2023 The Chookaszian Accounting Research Center at the University of Chicago Booth School of

Business.

696 j. h. choi, j. pacelli, k. m. rennekamp, and s. tomar

in job postings leads jobseekers to click on firms with higher diversity scores,

with such effects varying across jobseeker demographics. A follow-up survey

provides evidence on potential explanations for why jobseekers value diver-

sity information. We then examine how jobseekers’ preferences for diversity

relate to disclosure choices under the U.S. SEC Human Capital Disclosure re-

quirement. We find that firms in industries characterized by higher jobseeker

responsiveness to diversity information tend to voluntarily disclose diversity

metrics in their 10-Ks under these new disclosure requirements.

JEL codes: C93, D40, D83, J64, M14, M40, M41

Keywords: diversity; job search; human capital disclosures; field experi-

ment

1. Introduction

Recent social movements have generated a renewed emphasis on promot-

ing diverse and inclusive workplaces. For example, institutional investors

have increased their investments in firms that demonstrate a commitment

to diversity (Heath et al. [2021], Taylor [2021]). Regulators also increas-

ingly require firms to describe the extent to which their culture is diverse

and inclusive (Vaseghi, Marcogliese, and Bieber [2020]). Although these

pressures are imposed by outside stakeholders, it is the firm’s workforce

that is arguably most affected by a firm’s diversity practices. Yet, it remains

unclear whether jobseekers value diversity information when considering

potential employers. This issue is particularly important given the scarcity

of diversity information available to potential employees—our data suggest

that only 17% of public firms disclose either numerical metrics of gender

or racial workforce diversity in their 2020 10-K human capital disclosures

(HCDs) filed with the SEC. This study aims to assess how information about

the diversity of a potential employer affects individuals’ job-seeking behav-

ior, whether this varies based on worker and job features, and what fac-

tors determine whether firms voluntarily disclose such information in their

HCDs.

We conduct a field experiment with Zippia, a leading career advice

agency in the United States that provides individuals with information

about job postings. Importantly, Zippia also aggregates information about

companies into a general metric summarizing firm-level diversity. In our

experiment, we present jobseekers with email messages indicating jobs that

could interest them and randomly vary whether these emails include infor-

mation about prospective employers’ workforce diversity. The list of com-

panies presented to jobseekers is determined primarily by user preferences

regarding location, industry, and role. In other words, we hold constant

the jobs that are presented to a given jobseeker (based on their job search

criteria) and only manipulate whether the job listings also include diversity

information.1We then measure interest in diversity information based on

1For example, jobseekers displaying the same set of preferences (e.g., technology compa-

nies in St. Louis, Missouri) will receive the same set of firms in the initial email they receive,

do jobseekers value diversity information? 697

whether participants click on more diverse firms when diversity metrics are

included in a job listing message.

Our field experiment is appealing for several reasons. First, it allows us to

randomize the presence of diversity information in job listings while hold-

ing constant the set of firms provided to users and other important job

search attributes, such as wage, location, and underlying diversity. This ran-

domization is practically impossible to achieve in archival settings (Floyd

and List [2016]). Second, we can infer prospective employees’ intentions

to apply for a job in a real-world setting through “click-throughs” on the

emails they receive.2Such user-level job search data are typically unobserv-

able in an archival setting. Third, our large sample of individual job search

data across thousands of firms allows us to assess jobseekers’ heterogeneous

responses to the provision of information in real-world conditions. Finally,

as discussed below, our setting also allows us to assess how jobseekers’ inter-

est in diversity information relates to real firms’ disclosure decisions.

Our goal is to examine how jobseekers respond to incremental informa-

tion about diversity. Addressing this does not require us to take a stance on

the optimal level of diversity per se or to determine how beneficial diversity

is for the workplace. Rather, we argue that any response to diversity infor-

mation depends on jobseekers both being sensitive to underlying diversity

in their prospective employer and perceiving a diversity signal to be infor-

mative. There are compelling reasons why workers would respond positively

to information about diversity, as employment at a diverse firm can benefit

workers directly and indirectly (Williams and O’Reilly [1998]). Direct ben-

efits can stem from a worker being a diverse candidate and receiving more

interest from the firm, or from a worker deriving utility from being part of

a firm culture that values diversity. Indirect benefits relate to the idea that

diverse workplaces employ more talented individuals, foster better engage-

ment, demonstrate higher levels of innovation, exhibit better performance,

and generally have more satisfied employees (Page [2007], Abouzahr et al.

[2018], Roberson [2019], Lee [2021]).3In addition, workers may not be

sufficiently informed about a firm’s level of diversity (absent such informa-

tion being salient in a job posting) or may find the search costs associated

with independently collecting such information about firms too high.

On the other hand, there are valid reasons why jobseekers might respond

less favorably to diversity information in job postings. Workers could pri-

marily care about salary and benefits, rendering diversity information less

useful.4Conceptually, workforce diversity could also entail adjustment and

regardless of their experimental treatment condition. The only feature that varies is whether

the email also includes Diversity Scores for the set of jobs in the list.

2Zippia indicates that approximately 4% of click-throughs result in job applications.

3These arguments potentially explain why 80% of surveyed workers indicate that they want

to work for a company that values diversity, equity,and inclusion (Caminiti [2021]).

4Consistent with these arguments, a recent Harris Poll surveyed more than 1,100 U.S.

adults and found that the top three jobseeker considerations are salary, benefits, and