The Economics of Affirmative Action, edited by Harry J. Holzer and David Neumark, Cheltenham: Edward Elgar, 2004, 688 pp., ISBN 1-84376-117-3.

The book is an anthology of 29 papers published between 1976 and 2000 that focuses on affirmative action (AA) in the United States. The importance of these papers lies in the fact that they are based on evidence supported by data and analysis. As the editors note, AA concerns proactive action on the part of employers with a view to eliminating discrimination against minorities and women. In contrast, other anti-discrimination polices (such as human rights legislations across Canada) prohibit employers from discriminating against minorities and women on listed grounds such as race, sex, etc. In Canada and the United States, these measures are complaint based and not proactive, as is the case for AA which requires employers to undertake measures to increase the numbers of these groups in proportion to their external labour force representation.

AA in the United States, as the editors note, began with President Johnson’s Executive Order 11246 covering federal contractors with 50 employees or contracts worth $50,000 or more to supply goods and services to US government departments and agencies. Such contractors are required to file reports on any job in which minorities and women are underrepresented. Contractors are then obliged to make corrective efforts to address the under-representation or underutilization by making corrective efforts including written “goals and timetables.” Contractors may be sued and debarred from future contracts if they are judged to be not pursuing AA.

The Title VII of the Civil Rights Act of 1964 established the Equal Employment Opportunities Commission (EEOC) to administer and enforce the Act. In the case that an employer is found to have discriminated against women or minorities, the Act allows the courts to order AA measures, including hiring or reinstatement of employees. EEOC guidelines for defining adverse, disparate (or disproportionate impact on minorities and women) essentially establish a system of numerical yard-sticks.

According to the editors, AA in the labour market is not limited solely to the effects associated with contractor status “but ought to be viewed more generally as policies or actions that induce greater hiring (or promotion) of women and minorities.” The editors go on to suggest that in addition to the federal level, states and others levels of government have also awarded the numerical share of contracts to minority-owned businesses; this practice does not exist in Canada.

The book is divided into three parts: Part I has five articles on theoretical evaluations of affirmative action by such well known economists as Welch, Lundberg, Coate and Loury, Athey et al., and Schotter and Weigelt. These papers make a significant contribution to analyzing AA. The papers study important theoretical issues underlying AA. This analysis is “likely to stand the test of time.”

Part II has nine articles on the redistributive effects of AA on employment, education and contracting by Heckman and Wolpin; three by Leonard, Smith and Welch, and Rodgers and Spriggs; three on education and contracts by Conrad and Sharpe, Attiyeh and Attiyeh, and Cancian. The papers discuss whether AA policy has the intended effects of redistributing employment, educational and contracting opportunities to women and minorities. According to the editors, in education, redistributive effects are reflected in growth in minority (black) employment over time (1960 to 1995) and in even sharper changes in representation in professional schools such as law schools and medical schools. In one study, there is modest preferential treatment of women in three of the five disciplines (Economics, Biochemistry, English, Mathematics and Mechanical Engineering) and substantial preferential treatment of minorities relative to other US citizens in all five disciplines.

Part III evaluates efficiency/performance effects in the labour market, education and contracting. It contains ten articles on the labour market by Leonard, Griffin, two articles by Holzer and Neumark, Steel and Lovrich, Lott, Kolpin and Singell, Canor et al., Neumark and Gardecki, Canes and Rosen. It presents four papers on the Efficiency/performance effect in Education by Keith et al., Loury and Garman, Kane, and Dickens and Kane.

Finally, the book ends with a single article on Efficiency/contracting from Bates and Williams. The authors of some of these papers on performance effects in the labour market examine the productivity, profitability, and unit labour costs to test various hypotheses regarding the efficiency effects of AA. However, the perspective represented in these papers is limited to an economics perspective rather than one of fairness or justice. In both education and contracting, there is no overall test for the efficiency effects of AA.

I would recommend the book to serious scholars and to graduate students interested in studying affirmative action or employment equity in Canada.