Evidence from Nazi Germany and 1940’s America (and pretty much everywhere else) shows that discrimination is incredibly costly — to the victims, of course, but also the perpetrators. One modern solution is to invoke a diversity mandate. But new research shows that’s not necessarily the answer.

RESOURCES:

• "Discrimination, Managers, and Firm Performance: Evidence from 'Aryanizations' in Nazi Germany," by Kilian Huber, Volker Lindenthal, and Fabian Waldinger (Journal of Political Economy, 2021).
• "Diversity and Performance in Entrepreneurial Teams," by Sophie Calder-Wang, Paul A. Gompers, and Kevin Huang (SSRN, 2021).
• "Systemic Discrimination Among Large U.S. Employers," by Patrick M. Kline, Evan K. Rose, and Christopher R. Walters (NBER Working Papers, 2021).
• City of Champions: A History of Triumph and Defeat in Detroit, by Silke-Maria Weineck and Stefan Szymanski (2020).
• "The Allocation of Talent and U.S. Economic Growth," by Chang-Tai Hsieh, Erik Hurst, Charles I. Jones, and Peter J. Klenow (Econometrica, 2019).
• Genius & Anxiety: How Jews Changed the World, 1847-1947, by Norman Lebrecht (2019).
• "And the Children Shall Lead: Gender Diversity and Performance in Venture Capital," by Paul A. Gompers and Sophie Q. Wang (NBER Working Papers, 2017).
• "The Political Economy of Hatred," by Edward Glaeser (The Quarterly Journal of Economics, 2005).
• "Statistical Theories of Discrimination in Labor Markets," by Dennis J. Aigner and Glen G. Cain (Industrial and Labor Relations Review, 1977).
• The Economics of Discrimination, by Gary S. Becker (1957).

EXTRAS:

• "A New Nobel Laureate Explains the Gender Pay Gap (Replay)," by Freakonomics Radio (2023).
• "Edward Glaeser Explains Why Some Cities Thrive While Others Fade Away," by People I (Mostly) Admire (2021).
• "What Are the Secrets of the German Economy — and Should We Steal Them?" by Freakonomics Radio (2017).