Knowledge that Transforms

Arguably the most aggressive affirmative action program ever implemented in the United States was a series of court-ordered racial hiring quotas imposed on municipal police departments.My best estimate of the effect of court-ordered affirmative action on workforce composition is a 14 percentage point gain in the fraction African American among newly hired officers.Evidence on police performance is mixed.Despite substantial black-white test score differences on police department entrance examinations, city crime rates appear unaffected by litigation.However, litigation lowers slightly both arrests per crime and the fraction black among serious arrestees.

We study a multi-sector model of growth with differences in TFP growth rates across sectors and derive sufficient conditions for the coexistence of structural change, characterized by sectoral labor reallocation, and balanced aggregate growth. The conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists. Per capita output grows at the rate of labor-augmenting technological progress in the capital-producing sector and employment moves to low-growth sectors. In the limit all employment converges to two sectors, the slowest-growing consumption-goods sector and the capital-goods sector.

The purpose of this note is to correct an error in the seminal article on secession by Buchanan and Faith (1987). In their paper, Buchanan and Faith neglected an important effect: political separation affects markets and consequently individual private incomes.