Less racism and sexism means more economic growth

Give people freedom to specialize in what they are good at, and the economy will grow

1960s surgeon
(Image credit: (ClassicStock/Corbis))

Increased gender and racial diversity in the labor market since the 1960s has been a key factor in America's booming growth in productivity, suggests a new study by the National Bureau of Economic Research.

In 1960, 94 percent of doctors and lawyers were white men. By 2008, this was just 62 percent. Similar changes have occurred across professions throughout the U.S. economy during the last 50 years.

A half century ago, being a white man was clearly considered an advantage (if not a requirement) for employment in certain professions. Things have obviously changed since, though subconscious attitudes in this vein surely still persist.

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It should go without saying, but many people who are not white men — black women, white women, Latino men, etc — have a lot of natural aptitude for various professions. But in too many cases over the last 50 years, many of these talented individuals could not find such a job because they did not have the advantage of being a white man. And because white males were getting such a big share of the professional jobs, some white males with little natural aptitude surely ended up as doctors or lawyers simply because they were white males.

This can lead to lost productivity. If you have lots of white male doctors and lawyers who are comparatively poor at the job, and lots of other people who have the innate talent to be better at the job, but who are doing other things — working in low-skilled labor, being unemployed, working as homemakers — then you're going to lose productivity.

Slowly but surely, over the last 50 years, barriers to professional jobs for groups other than white males have been reduced. This has had a number of causes — for example, widely available and cheap contraception has allowed women the ability to defer having children and pursue a career. Anti-discrimination laws like the Civil Rights Act of 1964 and the Civil Rights Act of 1991 have made it more difficult to discriminate on the grounds of race.

This has led to a boost in the economy. The NBER study found that 15 to 20 percent of growth in aggregate output per worker between 1960 and 2008 may be explained by the improved allocation of talent.

Obviously, we still don't live in an entirely meritocratic world. Another NBER study found that job applicants with white-sounding names needed to send about 10 resumes to get one callback, while those with black-sounding names and identical resumes needed to send around 15 resumes to get one callback.

And of course, 62 percent of doctors and lawyers being white men is still a high number, considering that barely one-third of the U.S. population is made up of white males.

Also, there are lots of other grounds on which discrimination can occur beyond just race and gender — for example, discrimination based on the region a person is from, or a person's economic class. The authors of the study suspected that these two forms of discrimination may have increased in the past 50 years due to the growing class divide.

Still, this study does at least show that racism and sexism have decreased in the labor market, and that this decrease has had economic benefits.

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John Aziz is the economics and business correspondent at TheWeek.com. He is also an associate editor at Pieria.co.uk. Previously his work has appeared on Business Insider, Zero Hedge, and Noahpinion.