Which Industries Are the Best Employers for Women? An Application of a New Equal Employment Opportunity Index

Abstract

Abstract: This paper introduces and proposes a policy application for a new Equal Employment Opportunity (EEO) Index. The index is comprised of multiple measures of employers' human resource management outcomes and is designed to reflect employers' systemic EEO efforts. The index is applied to industry data from the Current Population Survey, and the tenets of Total Quality Management (TQM) theory are used for interpretation of results. It is found that the mining/construction industry provides a relatively inhospitable climate for women in the form, primarily, of a high degree of gender-related occupational segregation. The financial industry demonstrated the overall greatest gains for women during the 1990s. Closer examination of these industries with very good and very poor outcomes highlights the importance of addressing of industry performance on the index. JEL classification: J71, J78, J31, M11 Key words: discrimination, Total Quality Management, glass ceiling, occupational segregation, gender wage differentials The purpose of this paper is to demonstrate how policy makers can make use of a new Equal Employment Opportunity (EEO) Index to evaluate various industries' employment environments for women. An industry application of the EEO Index identifies gender disparities in employment outcomes across industries. Firms operating in poorly-performing industries might be slated for greater enforcement efforts by agencies such as the Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP). In addition, policy makers may choose to direct training and other assistance to poorly-performing industry groups to assist them in improving their EEO performance. The impetus behind the use of a single index to measure and compare the experience of female workers is multi-faceted. First, a comprehensive index permits assessment of systemic employment discrimination. Employers' human resource management activities (e.g., compensation, recruitment, and evaluation of workers) are inter-related systems that should be designed and evaluated together (Becker, Huselid, and Ulrich 2001). This suggests that pay, hiring, and promotion outcomes should also be assessed together. The EEO Index in this paper allows distinct human resource management activities to be evaluated as a system. Relatedly, race and gender employment discrimination often go hand-in-hand, and the EEO Index provides a means to consider the systemic employment experience across multiple groups. Second, summarizing an employer's EEO performance in a single index provides a common measure with which to compare the performance of different employers and industries, and it allows quantification and tracing of EEO progress over time. This search for a common index that describes the overall employment experience from the perspective of women and/or minorities is similar to the long-standing search by development economists for a single index to quantify, compare, and trace over time the social development of a country. (1) Third, the single EEO Index used in this paper serves as a more reliable and valid indicator of women's work experiences than previously available because it is rooted firmly in anti-discrimination laws such as Title VII of the Civil Rights Act of 1964, which prohibits discrimination in any employment decision. There are no other existing measures that capture women's work experiences so systematically, or that provide such meaningful benchmarks such as the EEO performance of other industries or EEO performance over time. Variation in the EEO Index across industries will be interpreted within the framework of Total Quality Management (TQM) (Latzko and Sanders, 1995). In part, theories of TQM suggest that there will exist some random or common variation in industries' EEO performances that occur as part of the economic system in which they operate, and there will exist some assignable or special causes of variation that are attributable to particular industries (Stevenson, 2002, chs. …