Doctoral Dissertation Research in Economics: Extracurricular Activities, Information Asymmetry, and Labor Markets

Studies find that elite firms—top consulting, finance, and law firms—heavily rely on extracurricular activities in hiring decisions, activities that favor upper-class people. This practice may worsen demographic gaps in labor market outcomes because access to, and persistence in, extracurricular activities is highly correlated with socioeconomic background. In addition, people from low-income backgrounds may not be aware that these extracurricular activities are important in firms’ hiring decisions. This lack of awareness may further exacerbate disparities across socioeconomic groups: if disadvantaged students misunderstand the importance of extracurricular activities, then this may keep them from high paying jobs and higher salaries to which advantaged students have access. This project will use economic theory and experiments to study employer hiring preferences as well as students’ (mis)understanding of employer preferences by conducting surveys and experiments on employers and college students participating in on-campus recruiting. The results of the study can enrich the growing academic, legal, and public discourse in the US about meritocracy in higher education (and beyond), structural discrimination, and the future of work. The results of this research will provide inputs into policies to improve the functioning of labor markets, and thus foster economic growth and reduce earnings inequality.This project seeks to answer two research questions: How and why do employers use extracurricular activities in hiring? What are the mechanisms and impacts of information asymmetry among job seekers about employers’ reliance on extracurriculars? The project will conduct surveys and experiments on both the demand and supply sides of on-campus recruiting labor markets, including employers and junior/senior college students. To address the first question, the project will elicit employer preferences using a detailed Incentivized Resume Rating exercise to study what employers value, particularly, preferences over extracurricular activities with varying costs, time investment, and personality traits. This project will also conduct an information intervention experiment to examine whether employers use extracurriculars to extract information about the unobserved productivity of applicants. The second question will be addressed by conducting a hypothetical Incentivized Resume Rating exercise on students and compare the results with the stated preferences of employers to test whether employers’ and students’ beliefs are aligned, and if not, whether this varies by students’ socioeconomic characteristics, time-use, and peer group networks. The project will gather data on job offers and salaries that students obtained to examine whether demographic differences in the degree to which information asymmetry can explain group-level disparities in labor market outcomes. The results of this research will provide inputs into policies to improve policies to improve the functioning of labor markets, and thus foster economic growth and reduce earnings inequality.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.