Promotion signaling, discrimination, and positive discrimination policies

This article studies discrimination in a model in which promotions are used as signals of worker ability. The model can account for statistical and taste‐based discrimination. In the short run, a positive discrimination policy is beneficial for workers in the middle of the ability distribution, because these workers are promoted if and only if the policy is in place. Instead, workers of either high or low ability suffer from the policy. In the long run, the policy benefits all targeted workers. The model can explain empirical findings about the effects of a gender quota on the boards of Norwegian companies.