Employers often recruit workers by invoking corporate social responsibility, organizational purpose, or other claims to a prosocial mission. In an era of substantial labor market inequality, commentators typically dismiss these claims as hypocritical: prosocial employers often turn out to be no more generous with low-wage workers than are other employers. In this article, we argue that prosocial commitments in fact inadvertently reduce earnings inequality, but through a different channel than generosity. Building on research on job values, we hypothesize that college graduates are more willing than nongraduates to sacrifice pay for prosocial impact. When employers appeal to prosocial values, they can thus disproportionately reduce pay for higher-educated workers. We test this theory with data on online U.S. job postings. We find that prosocial jobs requiring a college degree post lower pay than do standard postings with exactly the same job requirements; prosocial jobs that do not require a college degree, however, pay no differently from other low-education jobs. This gap reduces the aggregate college wage premium by around 5 percent. We present a variety of supplementary evidence using labor market data, worker survey responses, and a vignette experiment with hiring managers. The findings reveal an unintended consequence of employers’ embrace of prosocial values: it offsets macro-level inequality.

This article suggests that regulations targeting the U.S. public sector may influence racial inequality in the private sector. Since the 1990s, nine states have banned affirmative action practice in public universities and state governments. I theorize that although these bans have no legal jurisdiction over private-sector firms, they could influence such firms normatively. After such a ban, executives who have been skeptical of Equal Employment Opportunity (EEO) policies may feel more normative license to reduce commitment to EEO practices. Using a difference-in-differences estimation on 11,311 firms from 1985 to 2015, I find that the bans are indeed associated with slower racial progress in private-sector firms: after a state adopts the affirmative action ban, growth in the proportion of Black managers in establishments with corporate headquarters in that state slows by more than 50 percent, and this slowdown is mostly concentrated in firms with politically conservative CEOs. These findings suggest a mechanism for the persistence of racial inequality and show that regulations can influence actors well beyond legal jurisdictions.

Employers often recruit workers by invoking corporate social responsibility, organizational purpose, or other claims to a prosocial mission. In an era of substantial labor market inequality, commentators typically dismiss these claims as hypocritical: prosocial employers often turn out to be no more generous with low-wage workers than their competitors are. In this paper, we argue that prosocial commitments in fact inadvertently reduce earnings inequality, but through a different channel than generosity. Building on research on job values, we hypothesize that college graduates are more willing than nongraduates to sacrifice pay for prosocial impact. So when employers appeal to prosocial values, they can disproportionately reduce pay for higher-educated workers. We test this theory with data on online US job postings. We find that prosocial jobs requiring a college degree post lower pay than standard postings with exactly the same job requirements, whereas pay at prosocial jobs not requiring a college degree pay no differently from other low-education jobs. This gap reduces the aggregate college wage premium by around 5 percent. We present a variety of supplementary evidence using labor market data, worker survey responses, and a vignette experiment with hiring managers. The findings reveal an unintended consequence of employers' embrace of prosocial values: it offsets macro-level inequality.

This article explores racial stratification in work environments. Inequality scholars have long identified racial disparities in wage and occupational attainment, but workers’ careers and well-being are also shaped by elements of their work environment, including firm culture, managerial style, and work-life balance. I theorize two processes that could lead to racial inequality in firms’ work environments: (1) employee sorting due to exclusionary practices, and (2) spillover from racial differences in occupation and geographic location. To test this, I gathered a unique firm-level dataset composed of one million employee reviews, covering most large and medium-sized firms in the United States. I show that firms with more Black employees score lower for managerial quality, firm culture, and work-life balance, and firms with more Asian employees score higher on these dimensions. However, Asian employees’ advantage disappears when controlling for occupation, industry, and geography, whereas Black employees’ disadvantage persists, suggesting that the process of firm-level employee sorting is at work. Consistent with this, I find that Black employees’ disadvantage is strongest in areas with more conservative racial attitudes and more prevalent workplace racial discrimination. I then replicated the main findings using two entirely different data sources. Together, these results underscore racial inequality in work environments, an overlooked but important dimension of workplace inequality.