Anti-Discrimination or Reverse Discrimination: The Impact of Changing Demographics, Title VII and Affirmative Action on Productivity

Abstract

This study estimates the changes over time in the relative productivities of minorities and females. I find no significant evidence that the productivity of minorities or females decreased relative to that of white males as relative minority and female employment increased during the 1960s and 1970s. This study also compares the impact of Title VII and affirmative action and presents evidence that Title VII litigation has played a significant role in increasing black employment. This suggests that the employment of minorities and females has not entailed large efficiency costs and that Title VII litigation has had some success in fighting racial discrimination. The EEOC has sometimes been credited with opening up new pools of labor that corporations somehow contrived to ignore, and occasionally with hastening the breakdown of traditional barriers to labor mobility.... But in the context of the market's endless search for efficiency, these anomalies would have been eliminated anyway, leaving only the question of whether they were worth the expenditures compelled by law. Affirmative action is a net cost to the economy....And the true dynamic effects-the opportunity cost of all this expense and effort, the diminution of competition, inefficiencies due to the employment and promotion of marginal labor and the consequent demoralization of good workers-can only be a matter of conjecture, although they are clearly the most important of all. Senator Orrin Hatch, 1980