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

Opponents of the integration by race and gender of the American workplace have argued that forced equity will entail reduced productivity as employers are forced to hire lower quality females and minorities. The numerous wage equation studies always reach the same dead-end: residual differences across race or gender are due either to discrimination or to unobserved quality differences. This study takes a new approach, and directly estimates over time the ratio of minority to white male, and of female to white male productivity, using a new two-digit SIC industry by state production function data set for 1966 and 1977. The major finding is that there is 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 1960's and 1970's. This study also 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. Direct tests of the impact of Title VII litigation and affirmative action regulation also find no significant evidence that these policies have contributed to a productivity reduction.