August 2, 2019

What We Can Learn About the Economics of Discrimination from a Chilling Study of 1930s Germany

By Kilian Huber, Volker Lindenthal, & Fabian Waldinger

Large-scale, government-directed discrimination against a group of people is extremely damaging to those being targeted. It also permeates every aspect of society, including business. For example, talented people are often excluded from leadership positions if they belong to the group that faces discrimination. What are the costs of this, beyond stifling or ending the careers of thousands of people? Do corporations become less profitable when they adopt discriminatory attitudes and exclude highly qualified individuals from leadership roles? And how much do entire economies suffer when governments enact discriminatory policies against certain groups?