The White House Economic Report 2026 has revealed that the country’s Diversity, Equity, and Inclusion (DEI) policies have reduced productivity and economic output.

Citing research that found no empirical relationship between diversity measures and firm performance in the country’s workforce, the report noted that expected economic benefits from DEI efforts did not materialise. Other metrics cited by the report included return on assets, return on equity, and total shareholder return.

Economists involved in the research used federal labour data and statistical modelling to pinpoint what they described as increases in minority management share beyond expected levels. They used this measure as a proxy for DEI-driven hiring.

According to the report released on Monday, April 13, by 2023, industries that heavily pursued DEI were approximately 2.7 per cent less productive than those that did not.

“The fact that this negative relationship only appears after 2016, when DEI pressures intensified, suggests that this finding has nothing to do with changes in the demographic composition of managers directly but rather with the DEI-based promotion practices that prioritises race over qualifications and contribution,” the report said, adding, “It does not speak to the capabilities of any demographic group; an opposing discrimination against minorities would likely have caused a similar productivity decline.”

It further noted that DEI initiatives, as they are known today, were not widely practiced in the American private sector until the 2010s, when the media and educational institutions began promoting them between 2013 and 2015.

“Research by Rozado (2020)—and later by Rozado, Al-Gharbi, and Halberstadt (2023)—documents a substantial shift in the language used by elite media and education institutions starting in about 2013–15. Much greater social emphasis was suddenly placed on terms related to identity-based concerns (e.g., racism, sexism, and gender discrimination),” the report said.

The report noted that the results from the research implied that DEI practices led to inefficient management, which raised the cost of doing business.

“These costs get passed down to consumers in the form of higher prices or worse quality. They also have an impact on the companies themselves, which end up hiring fewer people and paying their workers less. In the aggregate, the cost of mismanagement was roughly $94 billion annually by 2023, or 0.34 percent of U.S. GDP. This is an average cost of about $1,160 annually for a family with two working adults,” the White House Economic Report 2026 stated.

The analysis linked increased DEI-focused hiring to declining productivity, concluding that such practices “had negative effects on aggregate productivity.”

The report observed a sharp rise in minority representation in management roles after 2015, noting that the increase accelerated significantly in the years that followed as DEI programmes expanded across corporate America. It attributed the shift to widespread adoption of DEI initiatives, adding that references to DEI became “ubiquitous in American industry” as companies invested heavily in programmes, consultants, and new executive roles.

It further noted that the Chief Diversity Officer position, which was once rare, became the “fastest-growing C-suite executive position” during the 2010s.

The report concluded that these increases coincided with declining output per worker and rising inefficiencies in management allocation.