The Supreme Court just upended decades of established precedent by eliminating any direct consideration of race in admissions. Used only by elite colleges and universities, affirmative action ensures that all students benefit from a diverse student body. This decision has immediate implications for universities, which must now engage in ever-more costly recruiting efforts.

Interestingly, the decision allows a loophole by which applicants can indicate their race by describing, for example, how they overcame challenges they encountered because of their race.

Allowing for race to contribute to admissions decisions through such imperfect and subjective proxies is a very inefficient means for colleges and universities to achieve their diversity objective. It imposes substantial costs on admissions committees, but it also imposes substantial costs on applicants, as they strive to craft a personal statement to demonstrate race-based adversities. The additional costs to both universities and applicants to achieve an objective that could be met more cheaply is what economists would call a dead-weight loss to society.

This is money and time that could otherwise be devoted to improving educational opportunities for a broad swath of students, including those students without elite institutions on their radar screen. It incentivizes applicants to focus on how their race has specifically impacted their life and diverts time and attention from more valuable educational activities. 

It is well-established that a ban on affirmative action in university admissions will result in a substantial drop in the share of qualified Black and Latino students at elite institutions. But we are still only talking about a very small share of the 2 million college undergraduates a year who would be displaced. The larger societal problem is that these elite schools provide the pipeline to leadership roles in society.

These graduates are overwhelmingly more likely than those from broad-access institutions to earn professional and graduate degrees, and to become the doctors, lawyers, legislators, professors and executives who have leadership roles in society. And, as my research shows, race is not an important determinant of success in advanced degrees programs among those who earned their undergraduate degree from an elite institution, whether or not any individual student may have benefited from affirmative action. A reduction in the number of Black and Latino undergraduates will inevitably result in a reduction in the diversity of professionals in these leadership roles. 

The narrowing of the pipeline provides a further challenge to employers who value diversity in their workforce and leadership. Elite employers recruit and hire graduates of elite educational institutions. Federal contractors — that includes defense firms, pharmaceutical companies and universities — have a legal responsibility to take proactive steps to recruit and advance qualified minorities. But with fewer Black and Latino graduates of elite institutions, firms will find it harder — or, at least, more costly — to meet their diversity goals.

Expanding recruiting to a broader range of colleges and universities is a start, but this does not by any means guarantee that recruiting efforts will successfully create a leadership pipeline. Elite education confers a vast array of professional advantages beyond the greater rigor of the coursework, and includes networks and mentoring. Even the most talented of nonelite graduates, of any race, who is employed by a firm in which they are immediately ranked and compared to their counterparts who have an elite education will find advancement challenging.  

Affirmative action in university admissions served as a relatively low-cost method of advancing societal goals, by offering a pipeline to leadership roles. In our country’s continued efforts to overcome its legacy of racial injustice and inequity, banning affirmative action causes a dead-weight loss for everyone.

Joni Hersch, author of the analysis “Affirmative Action and the Leadership Pipeline,” is an economist who works in the areas of employment discrimination and empirical law and economics. She is the Cornelius Vanderbilt chair professor of law and economics at Vanderbilt University and co-director of the Ph.D. Program in Law and Economics.