Giving Compass' Take:

· According to Futurity, more talent and greater equality in the workforce have contributed to 25% of the United States' GDP growth between 1990 and 2010.

· How can donors and philanthropists support workplace equality?

· Check out this article about talent-driven economic development.

Conservatively, 25% of the growth in United States’ gross domestic product (GDP) between 1960 and 2010 is attributable to greater gender and racial balance in the workplace, report researchers.

That number could even be as high as 40%.

“There’s a huge literature in labor economics on discrimination and wages and labor force participation,” says Charles I. Jones, professor of economics at the Stanford University Graduate School of Business.

As a macroeconomist, though, Jones recognized a striking gap in this line of inquiry. “People have said things like ‘discrimination reduces wages by X amount,’ but no one has tried to add up the effects and find out the aggregate consequences of these problems in the labor market.”

With three colleagues, Jones did just this, and reported the findings in the journal Econometrica.

In 1960, roughly 94% of doctors and lawyers in the US were white men. That number was closer to 60% 50 years later. By modeling the way in which this skewed distribution changed, Jones and his colleagues were able to uncover how balance in the workplace contributes to GDP.

The mathematical model they use rests on a single, straightforward assumption: The distribution of talent for most professions is the same for men and women of all different races. (Exceptions exist in occupations that require physical strength, like construction.) Given this assumption, the demographic profile of, say, lawyers should mirror the gender and racial demographics of the United States.

“The 94% figure, of course, is really, really, really far from that,” Jones says, “which suggests that in 1960, you had all these not-very-talented white men who were doctors and lawyers and lots of extremely talented people from other groups who were excluded. In the past 50 years, these groups have been changing places.”

Read the full article about workplace equality and GDP growth at Futurity.