Racism, xenophobia, and other forms of discrimination against minorities are, sadly, common phenomena—throughout history and in the current moment. In the United States, the Black Lives Matter movement and the protests that followed the murder of George Floyd in Minneapolis highlight that many Americans consider discrimination a serious problem in the country today.
In recent research, my coresearchers—Volker Lindenthal and Fabian Waldinger, both at the University of Munich—and I consider how discrimination affects a country’s economy. Discrimination is extremely hurtful to individuals from targeted minorities. But, as we demonstrate, the effects of excluding talented individuals from economic opportunities tend to go further: when a society discriminates against a specific group, its entire economy can suffer.
The case we analyzed involves discrimination against Jews in Nazi Germany. We looked at the period after the Nazis gained power, on January 30, 1933, when discrimination against Jews quickly became commonplace in Germany. Many Jews were forced out of their jobs. By 1938, individuals with Jewish ancestry had effectively been excluded from the German economy.
