Freakonomics Radio
480. How Much Does Discrimination Hurt the Economy? (Replay)
Nov 9, 2023
Join Killian Huber, a University of Chicago economics professor, Silke-Maria Weineck from the University of Michigan, and Sophie Calder-Wang from Wharton as they explore the hefty economic toll of discrimination. They discuss shocking historical parallels, such as the impact of Jewish exclusion in Nazi Germany on corporate performance. The conversation also delves into the effectiveness of diversity mandates and the challenges of achieving true equity in workplaces, offering intriguing insights into how discrimination shapes economies today.
57:50
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Quick takeaways
- Discrimination against talented individuals leads to negative impacts on firms, including lower share prices and reduced profits.
- Organic diversity, driven by personal choice, is more beneficial for team performance compared to forced diversity based on quotas.
Deep dives
Effects of Discrimination on the German Economy
Discrimination against Jewish business executives in 1930s Germany led to their forced removal from top management positions, causing significant negative impacts on firms. The expulsion of these highly skilled and experienced managers resulted in a decline in company performance, including lower share prices, reduced profits, and decreased efficiency. The negative effects persisted for at least 10 years after their dismissal. This research highlights the importance of retaining and valuing talented individuals in an economy and the potential long-term consequences of discrimination.
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