Organizational Diversity, Labor Markets and Wage Inequality

The demand shifts that have played an important role in driving up wage inequality in the United States during the past quarter century are changes in the world of organizations. However, despite great advances in organizational theory during the same time period, there has been little progress in understanding how organizational processes shaped the evolution of inequality. Most theory and research focuses on processes internal to organizations. The author presents theory and evidence suggesting that progress can be made through greater attention to the consequences of organizational diversity for matching and inequality in the labor market.