Homophily versus Status-seeking in the Search for Startup Jobs

Abstract: In a study of online job-seekers in the software engineering industry, we identify a trade-off between homophily and status when minority job-seekers (i.e., women and non-Whites) search for startup employment. Homophily perspectives predict that minority job-seekers will favor minority-founded startups, whereas status-seeking perspectives predict that these job-candidates will favor startups founded by non-minorities (i.e., Whites or males). To resolve this tension, we theorize that minority job-seekers will be primarily concerned about their recruitment prospects, and that they will consequently overweigh minority-founded startups in their job search, anticipating more favorable recruitment outcomes at these ventures. Consistent with this claim, we find that minorities forgo the benefits of status and seek startup employment with minority founders. We also find that this effect is amplified when candidates’ recruitment prospects are more uncertain and concerns about their chances of hire are therefore more salient. Our findings are supported by observational data as well as experimental evidence.