Team diversity evaluation by research grant agencies: Funding the seeds of radical innovation in academia?∗

We analyze whether funding bodies are biased against diverse teams, which have often been linked to the production of transformative research. We develop a general framework that compares the drivers of success in the ex-ante grant decision process to the drivers of success in ex-post performance. We use our framework to systematically analyze the decisions of one of the major public funding organizations for scientific research worldwide, the UK’s Engineering and Physical Sciences Research Council (EPSRC). We find that (structurally) diverse teams are not only penalized but are also biased against. Indeed, although teams that exhibit greater diversity in knowledge and skills, education, and/or scientific ability, are significantly less likely to obtain funding, they are generally more likely to be successful. We provide evidence suggesting that funding agencies may be biased against diversity, not because applications of diverse teams are more diffi cult to evaluate, but because they are perceived to be less safe or less doable. JEL Classification numbers: O32, I23