Rohini Pande in Science Magazine: “Identity politics” is economic policy

This article first appeared in Science Magazine on January 16, 2025

In the wake of the November 2024 US election, several commentators have suggested that the US Democratic Party abandon its commitment to so-called “identity politics,” which they identify as elitist, condescending, and divisive. They argue that rather than focusing on these “cultural” issues, progressives should prioritize economic concerns. Yet identity politics, at a fundamental level, is driven, and dominated, by economic concerns. Growing bodies of social science evidence make increasingly clear how identity politics—in terms of ensuring equal rights for minorities and women in the workplace and in the world and in terms of affirmative action to ensure equity of opportunity—is good economic policy. Opposition to identity politics is often built not by the culturally and ethnically diverse working class who benefit but by lower-ability economic elites who feel that their advantage is under threat. By making it harder for such entrenched elites to retain power, affirmative action may actually improve both the quality of individuals promoted in an ostensibly meritocratic system and overall economic outcomes.

Before the election, the political right attacked DEI (diversity, equity, and inclusion) initiatives in firms and colleges, and those attacks have been echoed by ostensibly more progressive sources. The claim is that DEI initiatives, such as recruiting and promoting individuals on the basis of identity over merit or preventing potentially offensive behavior in the workplace, are damaging to the quality of work produced by businesses or schools, because they result in the recruitment and promotion of less-skilled workers as well as onerous and costly restrictions on freedom of expression or academic inquiry that provide no tangible benefit to the groups they are supposed to help.

Yet the political right clearly believes there is good reason to invest time and resources in identity politics of their own, weakening existing rights and safeguards. In recent years, we have seen both important legal rulings and the passing of new laws that, directly or indirectly, target underprivileged and minority groups. For example, in Shelby County v. Holder (2013), the US Supreme Court, by means of a majority comprising judges appointed by the political right, removed protections against racially discriminatory voting laws. In 2022, the court overturned the long-standing precedent of Roe v. Wade, removing the right to bodily autonomy and appropriate health care for millions of women. In 2023, the court partially reversed a precedent permitting certain forms of affirmative action, citing conflict with the equal protection clause of the 14th Amendment. More recently, the political right has attempted to pass hundreds of anti-LGBTQ bills in state legislatures.

So, is progressive identity politics in fact the distraction from pressing economic concerns—or the unnecessary economic burden—that its critics claim it to be? Or rather is it an effective strategy to improve the economic status of disadvantaged groups?

It is certain that, in many countries, identity, in particular forms, is frequently closely correlated with economic status, such as income, individual wealth, societal wealth, and access to networks and public services. In the United States, for example, the Black-to-white per capita wealth ratio is 1 to 6. In India—where Hindu, Muslim, and Scheduled Caste communities are segregated much like Black and white communities are in the United States—public facilities and infrastructure are systematically less available in Muslim and Scheduled Caste communities. Bangladeshi, Black African, and Pakistani households in the United Kingdom are at substantially higher risk of deep poverty. Globally, on average, women earn 20% less than men. Disability is commonly linked to lower average pay and job security.

There are several reasons for these economic disparities. First, there are intergroup histories of conflict and exploitation. The white-to-Black wealth gap in the US is a direct result of centuries of slavery; millions of white citizens still benefit directly from inherited wealth, or societal wealth, created by Black chattel slaves. Second, bias remains widespread. Legal systems are more likely to arrest and convict Black people. Physicians discriminate against Black Americans, relative to white, when evaluating the existence and severity of disabilities. Third, social and cultural norms—such as the traditional belief in India that a wife working outside the house brings shame on the husband or that certain castes should only be permitted a restricted set of occupations—can limit access to work for certain groups. Fourth, legally sanctioned discrimination and removals of rights—from abortion bans to so-called “bathroom bills”—can deny members of certain groups the same freedom to make decisions about their labor market participation as their white, male, straight peers. Finally, networks are vital to obtaining jobs, financial support, and critical information from within institutions. Many networks arise within ethnic or racial groups or within a single gender. Networks can also be formed within organizations around social activities that are mostly enjoyed by one group. Students from wealthy families who are exposed to similarly wealthy peers at elite universities have better employment outcomes than less wealthy students who are similarly exposed. Without networks that extend into the upper ranks of workers within existing structures, it is relatively more difficult for excluded groups to make progress.

These mechanisms driving economic disparities between groups are fundamentally unjust, in that they are not reflective of any inherent difference in ability or willingness to work. They are also socially costly. This is because they undermine what are intended to be merit-based processes in education, recruitment, and promotion.

Multiple correspondence experiments—in which researchers sent fake identical resumes differing only in group identity in response to real job advertisements—conducted over the past 20 years in several countries show that identity, on several dimensions, including race or ethnicity, disability, and gender, is linked to discrimination in hiring. “Blind” auditions, which remove opportunities for bias, increase the percentage of women hired by symphony orchestras and have now become the norm. Even where gatekeeping into an education system or a profession eliminates opportunities for subjectivity and discrimination, greater economic resources or better support may help individuals compete: Students from wealthy households may be able to find quiet places to work; their parents may pay for tutors; they may not be forced to take part-time jobs; and, if well connected, they may receive insider advice on how to maximize their chances in college applications. Many professions now effectively require job applicants to have completed an unpaid internship before being considered for a job, and this is near impossible without parental support. Women may feel pressured to do a far greater share of housework and childcare while working than male peers with compliant wives and so find themselves being held to the same standard for promotion yet unable to give the same time and energy to their jobs.

As a result of these structural inequities in education, recruitment, and promotion, less innately talented and motivated individuals who benefit from these inequities can more easily progress in the system, at the expense of similarly or more innately talented and motivated individuals who are members of disadvantaged groups. (There is, of course, also a fundamental injustice even in apportionment of resources according to innate talent, as Michael Sandel has explored extensively.) This can lead to a vicious circle of disadvantage: Members of disadvantaged groups, lacking wealth and networks and subject to bias, fail to progress in institutions that control wealth and power, so these institutions remain biased, group networks within them cannot form, and, eventually, the wealth generated by the institution is not shared fairly with these groups. So, the next generation will face exactly the same hurdles, whereas more privileged groups make economic progress—and thus overall inequality increases. As President Lyndon B. Johnson said: “You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, ‘You are free to compete with all the others,’ and still justly believe that you have been completely fair. Thus it is not enough just to open the gates of opportunity. All our citizens must have the ability to walk through those gates.”

However, the innate inequality of opportunity in apparent meritocracies also means that, contrary to much popular opinion, affirmative action may actually improve the quality of individuals promoted in an ostensibly meritocratic system, hence improving overall economic outcomes. We see this in studies of political “reservation” for women, where both successful and failed candidates for election can be observed. Female candidates for office consistently suffer discrimination, both during candidate selection and during elections. Reservation attempts to correct this either by enforcing quotas at the candidate-selection stage or by reserving some elected positions for women. Besley et al. investigated a gender quota system implemented by Sweden’s Social Democratic Party in 1993. They found that this quota raised the competence of male politicians where it raised female representation the most, and they argue that the resignation of mediocre male leaders was a key driver of this effect. Bhavnani et al. examined the effect of political quotas in India and found that randomly and quasi-randomly assigned quota politicians have lower average education than nonquota politicians but the same or higher quality. Paredes-Haz investigated Chile’s constitutional election, which included gender quotas, and found that voters who better understood the quota system also voted less for less competent men.

Objective assessment of the quality of political leaders is difficult. The clearest observable measure is level of education, but that measure itself can be affected by structural inequality; politicians from disadvantaged groups may also have fewer educational opportunities. As a result, relying solely on this metric to measure quality may result in an underestimation. Besley et al. solved this problem by comparing the income of elected candidates to that of their close social peers; Bhavnani et al. built on this innovation by also comparing the educational achievements of candidates to those of their close social peers. In this way, they controlled for the effects of structural inequality.

These findings on candidate quality are encouraging because increased political representation of disadvantaged groups can also be directly economically beneficial to those groups. Chattopadhyay and Duflo found that women elected in reserved leadership positions in Indian villages invest more in public resources that benefit their gender. In research studying reservation for Scheduled Castes and Scheduled Tribes in the same context, I found that legislators occupying reserved seats increase transfer to their own group.

Affirmative action may improve quality but still, in some settings, harm its beneficiaries—for example, by placing them in academic programs where, given their reduced previous access to education, even given above-average innate talent and motivation, they do not yet have the skills and knowledge to succeed. The evidence on this is mixed. Arcidiacono et al. found that less-prepared minority science students admitted through affirmative action to higher-ranked campuses had lower persistence rates and took longer to graduate. In contrast, Bagde et al. studied an affirmative action program in India that fixes percentage quotas for women and disadvantaged castes across 200 colleges and found no such adverse impacts. Bleemer looked at the effects of Proposition 209, which removed race-based affirmative action in California’s public colleges, and found that those who would previously have been eligible for affirmative action subsequently went to lower-quality colleges, obtained lesser degrees, and earned lower wages than they would have had the proposition not passed. So, he finds that even if students recruited through affirmative action perform less well than their better-trained peers, they still, overall, benefit from the program. The answer here, if we believe that affirmative action is compensating for structural inequality and recruiting students of at least equal innate ability and motivation to their academic peers in these high-ranked colleges and who deserve to achieve as much as these peers, might be to provide intensive catch-up training to these students before any course begins.

More meritocratic access for disadvantaged groups to senior positions in politics, businesses, and academic institutions through affirmative action can also more directly help end vicious circles of disadvantage. Oppressive gender relations at work can lead women to abandon promising jobs. Adams-Prassl et al. found that female-managed firms exhibit a key difference relative to male-managed firms: In female-managed firms, male perpetrators are less likely to remain employed after attacking their female colleagues. Women in many countries with strong patriarchal norms may believe that they are not capable of leadership; in Beaman et al., I and colleagues looked again at reservation of leadership positions for women in Indian villages. We found that the program appears to narrow the gender gap in aspirations of parents for their children and of children for themselves. In addition, teenage girls spent more time in school and less time on household chores. These girls are almost certainly more likely to become leaders themselves and, subsequently, to invest in public resources for women.

It is clear, therefore, that where groups are disadvantaged through bias, wealth, income, or networks, ignoring group identity both perpetuates disadvantage and increasing intragroup inequality and leads to socially inefficient outcomes, where innate talent is wasted. And this is true even in what can appear to be a well-run meritocracy. So, identity politics, where it allows more efficient use of talent, is also good economic policy.

However, the right-wing strategy of condemning identity politics as divisive and unfair—and using these allegations as a political tool to divide the working class—remains effective. Supreme Court Justice John Roberts’s aphorism “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race,” while clearly disingenuous, reminds us that an apparent focus on only one or two aspects of the complex entity of structural inequality can be uncomfortable for some groups who understand that they, too, are encountering degrees of structural inequality and discrimination that are not always recognized or compensated for.

One answer, if we believe that innate talent and motivation is equally distributed across social groups but actual achievement is limited by structural inequities and if we want to create the most effective possible meritocracy, might be to take inspiration from the researchers studying politician quality and implement a two-stage application system, designed to distinguish innate talent and motivation from structural advantage, for candidates applying to competitive educational institutions, desirable jobs, or even, potentially, political selection committees. The first stage would assess the relative achievements of the candidate solely against the achievements of their social peers, selected according to multiple dimensions. For example, in the case of college admissions, we might use individual household financial information of the kind regularly provided in federal financial aid applications, together with aggregated and anonymized census information on community wealth, to construct a set of peers and then use standardized tests, such as the SAT or GRE, to assess any applicant’s percentile achievement relative to those peers. In the second step, this peer-based percentile ranking—which would apply to all applicants regardless of their race, ethnicity, gender, income, or physical abilities—would be used to construct the final ranking for selecting successful applicants. So, for example, a candidate from a low-income family in a majority nonwhite community who ranked in the top 0.5% of their peers might achieve a final ranking above a candidate from a wealthier family living in a majority white community who only ranked in the top 1% of their peers—even if the latter achieved a higher score on the standardized test itself. The underlying assumption here is that individual differences between social peers reflect individual innate ability but that differences between sets of peers reflect only structural inequity. To the extent that this is correct, a merit-based application system can both be explicitly fair to every applicant and effectively compensate for all elements of complex structural inequalities. Whether, in the eyes of activist judges determined to maintain a blind eye to de facto positive discrimination and continued economic advantage for existing economic elites, ensured by current structural inequalities, this would comply with the equal protection clause of the 14th Amendment is, of course, another matter.