About those studies that show how DEI programs boost corporate earnings

By Jon Miltimore. Excerpts:

"From 2015–23, McKinsey & Company, a multinational strategy and management consulting firm, released four separate studies showing that DEI initiatives boost corporate earnings. Unfortunately for DEI advocates, the research appears to be bunk.

A new study published in Econ Journal Watch, a semiannual peer-reviewed academic journal, shows that researchers were unable to replicate the results of all four McKinsey studies.

“[O]ur results indicate that despite the imprimatur often given to McKinsey’s 2015, 2018, 2020, and 2023 studies, McKinsey’s studies neither conceptually … nor empirically … support the argument that large US public firms can expect on average to deliver improved financial performance if they increase the racial/ethnic diversity of their executives,” professors John R. M. Hand and Jeremiah Green found.

This is not the only research that shows DEI initiatives are not the panacea for corporate earnings supporters claim them to be. Writing in the Harvard Business Review, Robin J. Ely, a professor of business administration at Harvard, and David A. Thomas, the president of Morehouse College, point out that “the rallying cries for more diversity in companies” are not supported “by robust research findings.” Ely and Thomas add, “We say this as scholars who were among the first to demonstrate the potential benefits of more race and gender heterogeneity in organizations.”

The idea that all these studies showing clear financial benefits to DEI are rubbish might be shocking to some readers, but it’s a familiar academic pattern. For well over a decade, scholars and media have publicly worried about the “replication crisis” in science. It turns out that an astonishing number of findings in various fields — from psychology and economics to sociology, medicine, and beyond — fail to hold up when other researchers attempt to replicate the findings, as Vox has explained."