How Policy Changes Could Impact Equity, Diversity, and Inclusion Work in Psychology 

Feb. 26, 2025

A series of recent executive orders aim to curtail federal support for equity, diversity, and inclusion initiatives (EDI, though referred to as DEI by the administration). These measures could have a profound impact on the field of psychology, including impacts to research funding, academic freedom, and workplace policies within psychology and related fields. 

These orders seek to prohibit EDI policies, casting these policies as superseding and supplanting federal anti-discrimination laws and therefore "illegal" for potentially violating federal civil rights laws. The administration has made it clear that it views EDI policies and initiatives as “race-based and sex-based discrimination.” 

APA is closely monitoring the implications of recent executive orders and departmental memoranda, particularly the "Ending Illegal Discrimination and Restoring Merit-Based Opportunity" executive order issued on January 21, 2025. This order seeks to eliminate federally funded EDI programs and prohibits federal agencies, contractors, and grant recipients from implementing policies that favor, or disadvantage individuals based on race, ethnicity, or gender. It specifically revokes affirmative action provisions in federal contracts and subcontracts ; bars the use of "diverse hiring slates" and DEI-related training in federally funded programs; and requires federal agencies to review and terminate DEI-related offices, programs, and activities. 

Many companies, universities, and other organizations have reportedly shut down or scaled back their EDI activities in response to the actions from the administration. 

Discrimination in whatever form is illegal under current federal anti-discrimination law, and employers have an obligation not to discriminate against applicants and employees. The executive order clearly states that it does not “create new legal standards,” and acknowledges that EDI initiatives “can [but do not necessarily] violate the civil-rights laws of this Nation”. Such initiatives do not inherently violate federal civil rights laws. 

As recent guidance issued by 16 State Attorney Generals opined, “The Executive Order . . . . conflates unlawful preferences in hiring and promotion with sound and lawful best practices for promoting diversity, equity, inclusion, and accessibility in the workforce. . . . . Policies and practices that promote diversity, equity, inclusion, and accessibility are not the same as preferences in individual hiring and promotion, decisions that have been found to be unlawful. The Executive Order cannot and does not prohibit these otherwise lawful practices and policies.”

As litigation is underway to untangle the meaning of “illegal” EDI under current federal anti-discrimination laws, the impact of this executive order remains unclear. At least one has been filed to block the implementation of this executive order, which should help clarify the legal landscape over the coming months. 

APA is carefully evaluating the potential impact of these developments on the work of psychologists.

APA/APASI Assessment

APA and APA Services, Inc. are concerned by these attacks on EDI policies, programs, and initiatives, which threaten to undermine science, psychological well-being, and equitable access to mental health care for all individuals. 

Decades of psychological research demonstrate that diverse teams drive innovation, equitable access to mental health care improves outcomes, and inclusive learning environments enhance academic achievement and well-being. 

APA’s initial assessment highlights the following key areas of concern: 

• Increased Discrimination and Health Disparities: Research consistently shows that discrimination based on race, ethnicity, gender, sexual orientation, and other factors has detrimental effects on mental and physical health. Limiting EDI initiatives can exacerbate the disparities regarding social determinants of health, particularly for targeted populations, which may lead to increased stress, anxiety, depression, and decreased access to healthcare. 
  
• Negative Impact on Employee Morale and Productivity: A diverse and inclusive workforce fosters a sense of belonging and value, leading to increased employee engagement, productivity, and innovation. Conversely, limiting EDI efforts can create a less welcoming and supportive work environment, potentially leading to decreased morale, productivity, and retention, particularly among employees from historically marginalized groups. 
  
• Hindered Recruitment and Retention of Diverse Talent: EDI initiatives are crucial for attracting and retaining a diverse workforce, which is essential for bringing a variety of perspectives, thought partnership, and experiences to problem-solving and innovation. Limiting these efforts can make an employer less appealing to talented individuals from underrepresented groups, hindering the ability to recruit and retain a workforce that reflects all the diversity of the American population. 
  
• Reduced Innovation and Creativity: Diverse teams have been shown to be more innovative and creative due to the wider range of perspectives and experiences they bring to the table. Limiting EDI initiatives can stifle innovation and limit the ability of organizations  to effectively address complex societal challenges facing the nation. 
  
• Impact on Research Validity and Generalizability: EDI considerations are crucial for ensuring that research findings are valid and generalizable to the entire population of the United States. Limiting EDI efforts can lead to biased research samples and methodologies, potentially producing inaccurate or incomplete results that fail to adequately represent the research impact on all Americans. This, too, can have significant implications for policy development and program implementation. 
  
• Undermining of Psychological Science: Psychology is committed to understanding and promoting human well-being for all. Limiting EDI work by employers can hinder the application of psychological science to address critical social issues, such as APA efforts to reduce bias, promote equity and increase access to positive mental health outcomes for all.
  

APA’s Commitment 

APA remains steadfastly committed to our values and mission – continuing our focus on creating inclusive systems, advocating for vulnerable communities who we serve, and addressing structural barriers to health equity for all. These goals are central to the application of psychological science to benefit society and improve lives and to uphold the ethical obligations of psychologists. 

At the same time, we need to carefully evaluate the impact of these potential developments and may need to adapt our work to be an effective voice for psychology in the evolving political and legal landscape. 

APA’s focus remains on creating environments that promote belonging, provide access to mental health resources, and ensure inclusive opportunities. As we navigate these changes, our commitment to our values remains a cornerstone of our mission, ensuring that the work we do aligns with both the changed political and legal landscape and the enduring needs of the communities we serve. 

What the Science Says

APA’s organizational assessment and position on EDI policies and initiatives are grounded in the best available science. 

Organizations are increasingly recognizing that Equity, Diversity, and Inclusion (EDI) are critical business strategies linked to competitive advantage, organizational performance, and profitability (Hunt et al., 2018).   

Discrimination is prevalent in the labor market. For example, the simple fact that a job applicant’s name sounds Black reduces the likelihood that the applicant will be called back, and this racial gap appears to be uniform across occupation, industry, and employer size (Bertrand & Mullainathan, 2004); non-work discrimination of Asian American employees was linked to job-related exhaustion (Dhanani et al., 2022); and statistics indicate that Native Americans have lower rates of upward mobility and higher rates of downward mobility than White Americans (Chetty et al., 2020).  

Rather than harming companies and employees, EDI policies appear to lead to many positive outcomes, including financial outcomes. Research indicates that prospective employees who perceive higher levels of support for diversity and inclusion in an organization tend to be more attracted to work at such an organization (Corrington et al., 2021). Employee engagement and retention are critical to organizational success, and EDI significantly impacts these outcomes. Inclusive environments are strongly correlated with higher employee engagement, commitment, and reduced turnover intentions, especially among historically marginalized groups such as Black women and professional immigrants (Bradley-Geist & Schmidtke, 2018).  

Moreover, Fortune 500 companies that issued statements supporting the Black community after race-related threats and are perceived as supportive of diversity and inclusion had increased revenues, even after controlling for revenue prior to making the statements (Corrington et al., 2021). Thus, EDI statements and policies can have a financial positive impact, as they are linked to a company’s ability to attract more employees and increase its revenue. 

Studies consistently find a relationship between organizational diversity and innovation outcomes. Diverse teams tend to be more innovative and creative (Hunt et al., 2018; Talke et al., 2010; Østergaard et al., 2011) and their innovation appears to be more efficient (Mayer et al., 2018). Teams that leverage cognitive diversity effectively generate more creative solutions, addressing complex organizational challenges more efficiently (Kilduff et al., 2000; Shin et al., 2012).  Additionally, researchers in the management field have found that pro-diversity policies are linked to innovation efficiency, measured by the number of new product announcements per R&D dollar spent by a company. This effect of pro-diversity policies on innovation enhances company value and appears to be stronger during recessions (Mayer et al., 2018). Relatedly, other researchers found that U.S. state-level employment nondiscrimination acts (ENDAs)— laws that prohibit discrimination based on sexual orientation and gender identity—are associated with innovation (Gao & Zhang, 2017). 

An effective EDI strategy can enhance team performance, employee engagement, organizational innovation, and brand equity. Companies that prioritize equity, diversity, and inclusion position themselves not only to thrive in an increasingly diverse global marketplace but also to achieve sustained competitive advantages, supported by robust empirical evidence. Such strategies and policies focus on reducing discrimination, prejudice, and structural inequities, leading to a more equitable society that benefits not only marginalized groups but everyone (see Follmer et al., 2024). 

APA Resources on Equity, Diversity, and Inclusion

From policies, reports, and continuing education to books for adults and children, APA has a wide range of resources and guidance to help psychologists integrate human rights into their daily practices and community efforts, amplifying their positive impact. 

What You Can Do

• Stay informed: Maintain awareness of EDI policies and the outcomes of legal cases and their potential implications for your practice, research, classroom, and the communities you serve. Follow APA’s Response Center for our most recent updates.
• Engage in evidence-based educational campaigns: Provide evidence-based information about the benefits and value of EDI policies, programs, and initiatives. Highlight the economic, social, and mental health benefits of environments that are inclusive for everyone.
• Share information with APA: To strengthen APA’s advocacy efforts, please share your insights and experiences regarding the impact of anti-EDI policies in your state and community as a psychologist. Your firsthand knowledge is crucial for informing our advocacy strategies.
• Support your colleagues and their work by continuing to support fairness, inclusivity, and scientific integrity: APA provides resources and guidance to help psychologists integrate human rights into their daily practices and community efforts, amplifying their positive impact. 
  
  

References

Bertrand, M., & Mullainathan, S. (2004). Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on labor market discrimination. American Economic Review, 94(4), 991–1013. https://doi.org/10.1257/0002828042002561 

Bradley-Geist, J., & Schmidtke, J. (2018). Immigrant workers: Psychological perspectives on managing across borders. Journal of Managerial Psychology, 33(7-8), 540-552. 

Corrington, A., Fa-Kaji, N. M., Hebl, M. R., King, E. B., Stewart, D., & Alao, T. (2022). The impact of organizational statements of support for the black community in the wake of a racial mega-threat on organizational attraction and revenue. Human Resource Management, 61(6), 699–722. https://doi.org/10.1002/hrm.22119 

Chetty, R., Hendren, N., Jones, M. R., & Porter, S. R. (2020). Race and economic opportunity in the United States: An intergenerational perspective. The Quarterly Journal of Economics, 135(2), 711–783. https://doi.org/10.1093/qje/qjz042 

Dhanani, L. Y., LaPalme, M. L., Pham, C. T., & Hall, T. K. (2023). The burden of hate: How nonwork discrimination experienced during the COVID-19 pandemic impacts Asian American employees. Journal of Business and Psychology, 38(3), 621–635. https://doi.org/10.1007/s10869-022-09848-6 

Follmer, K. B., Sabat, I. E., Jones, K. P., & King, E. (2024). Under attack: Why and how I-O psychologists should counteract threats to DEI in education and organizations. Industrial and Organizational Psychology, 17(4), 452–475. https://doi.org/10.1017/iop.2024.12 

Gao, H., & Zhang, W. (2017). Employment nondiscrimination acts and corporate innovation. Management Science, 63(9), 2982–2999. https://doi.org/10.1287/mnsc.2016.2457 

Hunt, V., Prince, S., Dixon-Fyle, S., & Yee, L. (2018). Delivering Through Diversity. McKinsey & Company. 

Kilduff, M., Angelmar, R., & Mehra, A. (2000). Top management team diversity and firm performance. Journal of Management, 26(6), 1191-1209. 

Mayer, R. C., Warr, R. S., & Zhao, J. (2018). Do pro-diversity policies improve corporate innovation? Financial Management, 47(3), 617–650. https://doi.org/10.1111/fima.12205 

Østergaard, C. R., Timmermans, B., & Kristinsson, K. (2011). Does a different view create something new? The effect of employee diversity on innovation. Research Policy, 40(3), 500–509. https://doi.org/10.1016/j.respol.2010.11.004 

Shin, S. J., Kim, T. Y., Lee, J. Y., & Bian, L. (2012). Cognitive team diversity and individual team member creativity. Journal of Organizational Behavior, 33(4), 547-576. 

Talke, K., Salomo, S., & Rost, K. (2010). How top management team diversity affects innovativeness and performance via the strategic choice to focus on innovation fields. Research Policy, 39(7), 907–918. https://doi.org/10.1016/j.respol.2010.04.001