Research suggests that hiring ‘diversity officers’ is a waste of money

‘Economics is what economists do’. This was Jacob Viner’s description. It isn’t all that helpful. The National Bureau of Economic Research – which is about the gold standard of academic economics – has recently produced papers with findings such as “Economically disadvantaged children who were exposed to the political empowerment of women during the period 1910–20 due to U.S. suffrage laws experienced large increases in educational attainment” and “Hotter School Days, Less Learning — Unless There’s AC”. Interesting subjects, no doubt, but it is hard to see how they are economics in any real sense.

But there is much good economics among the NBER’s output. Take a new paper by economists Steven W. Bradley, James R. Garven, Wilson W. Law, and James E. West titled ‘The Impact of Chief Diversity Officers on Diverse Faculty Hiring‘. The abstract reads, with the most salient bits highlighted,

As the American college student population has become more diverse, the goal of hiring a more diverse faculty has received increased attention in higher education. A signal of institutional commitment to faculty diversity often includes the hiring of an executive level chief diversity officer (CDO). To examine the effects of a CDO in a broad panel data context, we combine unique data on the initial hiring of a CDO with publicly available faculty and administrator hiring data by race and ethnicity from 2001 to 2016 for four-year or higher U.S. universities categorized as Carnegie R1, R2, or M1 institutions with student populations of 4,000 or more. We are unable to find significant statistical evidence that preexisting growth in diversity for underrepresented racial/ethnic minority groups is affected by the hiring of an executive level diversity officer for new tenure and non-tenure track hires, faculty hired with tenure, or for university administrator hires.

Since 1981, the nominal increase in  tuition fees and other costs – from $2,870 to $20,090 – is a cool 600%. In real (inflation adjusted) terms, the cost of studying has increased by 160%. Part of the reason for this is an explosion in administrative staff. As Paul F. Campos noted for the New York Times,

According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

As student debt becomes a more onerous problem in the American economy, we have to look at why fees have risen so much. This leads us back to the disproportionate increase in admin hires. And this should lead us to look for fat to cut. Thankfully, the economists as the NBER have helped us identify some. Who says economists don’t do anything useful?

John Phelan is an economist at the Center of the American Experiment.