Costly discrimination

It's long been said that discrimination entails a waste of talent as able people are prevented from making full use of their skills. A new paper (pdf) tries to quantify this by looking at the effects of the decline in racial and gender discrimination in the US since the 60s. It says:

Changes in occupational barriers facing blacks and women can explain 15 to 20 percent of aggregate wage growth between 1960 and 2008. Furthermore, essentially all of the gain is driven by the movement of women into high-skilled occupations.

Discrimination, then, has significant macroeconomic effects.

This matters, not just because there (might?) still be discrimination against women and ethnic minorities, but because gender and racial discrimination isn't the only souce of a misallocation of talent. The authors say:

We suspect that barriers facing children from less affluent families and regions have worsened in the last few decades. If so, this could explain both the adverse trends in aggregate productivity and the fortunes of less-skilled Americans over the last decades.

Not just Americans, of course.Class barriers are high in the UK too.

And there are other forms of misallocation of talent, such as poor careers advice at school and university, and the systematically bad hiring practices that favour yes-men, the irrational or known mediocrities over unknown potential stars.

Perhaps, therefore, human resources policies have more significant macroeconomic effects than generally supposed.

Comments

[Luis Enrique]

it's funny how in some cases right-wingers get very worked up about inefficiency (that meddling government!) but in other cases not so much. Why are champions of efficiency campaigning to pull down the class barrier to efficiency?

[Luis Enrique]

I meant of course: Why aren't champions of efficiency ...

[Mike Killingworth]

You know the answer, Luis.

The rightis very happy to see the income differentials return to pre-1914 levels, especially since the politics of identity is now replacing class politics.

[comprar loteria online]

Me ha encantado vuestro articulo y me ha sabido a poco pero ya sabeis lo que dice el dicho "si lo bueno es breve es dos veces bueno". Me gustara volver a leeros de nuevo.
Saludos