Prize or Penalty? The Reputational Effects of Diversity Scholarships in the Labor Market (WITHDRAWN)

Abstract

Many universities and companies have used diversity scholarships and pipeline programs to achieve organizational diversity goals. These programs target high-achieving members of underrepresented groups by offering them additional opportunities and resources. At the same time, however, these initiatives publicly identify their recipients as targets of affirmative action efforts, which can be stigmatizing. This paper investigates the reputational effects of diversity scholarships for recent college graduates seeking entry-level jobs. Using a multi-city audit study, I compare the rate at which employers call back applicants with diversity scholarships, applicants with other types of merit scholarships, and applicants with no scholarships at all. I also examine how the scholarship signals differ when applicant names have a Black racial cue versus a white racial cue. I find that while putatively white applicants with diversity scholarships and non-diversity merit scholarships receive more callbacks than white applicants without scholarships, putatively Black applicants do not receive similar benefits from either type of scholarship. Black diversity scholarship winners are treated more similarly to Black applicants without scholarships than Black applicants with non-diversity merit scholarships. The findings illustrate the importance of examining individual-level effects of diversity practices in addition to organizational-level outcomes.