So, I do not like level limits. The arguments for them are
a) Without level limits, demihumans would take over the world
b) level limits create a degree of balance; demi-humans get advantages at the beginning, humans get the later.
Both of these are from the 2e DMG (p. 22 of the black cover). I've heard both used in context of 1e. But both of these are shit arguments.
To the first, if limitless demi-humans would result in the demi-humans taking over, where are they? In 1e, demi-humans (except the half-orc) were unlimited in thief. Where are the 140th level elven thieves ruling over every thieves guild? They're unlimited in level and have about 400 years before they hit middle age... 370 years if they want to also be an 9th-11th level magic user. At 2500 XP per year, they're an 11/12 magic-user thief in that time. And 2500 XP per year isn't even trying that hard.... kick it up to 10,000 a year, and they're in the 11/17 range... and even that isn't trying that hard.
But these master thieves are nowhere to be found (the Bloodstone Lands are an outlier adn should not be counted). The super-high powered realms has 2 30th level characters: Halaster Blackcloak and the Symbul. Both are of human stock, and have an elven lifespan, but they're only 30th level, single-classed, wizards. A multi-class elven mage/thief would be 11/26 with the same sort of XP. Where are they?
To the second, level limits do a poor job of balancing. The idea is that they are dynamically unbalanced... you might suck at level 1, but you'll rip at level 9. But that requires the campaign to get to level 9. If it peters out in the 7th level range, then level limits are largely irrelevant... they never balance anything, because they don't ever stop someone from going as high as the levels go. If the level goes too high beyond the limit, though, then you wind up with characters who only advance on the gear carousel... THEY don't get better, but they get a sword with an additional +1, and that's the same thing, right?
My solution is to remove level limits, and give humans a mechanical advantage to make them worth playing. Yes, you should play the character, not the stats, but I can make up all sorts of characters. There's nothing that requires me to be Bob the Human Fighter. I could be Dwalim the Dwarf Fighter just as well, assuming the game is likely to stay under level limit. And Dwalim gets resistance to magic. But, as d20 showed us, if you make human characters worth taking, people will take human characters for those advantages... they'll play Bob because Bob is mechanically good, instead of playing Dwalim, who is mechanically good in a different way.
My 2e-focused solution is that humans get:
+1 to Charisma
+1 to all saving throws
+1 WP
+1 NWP
+10% to Climb Walls, +5% Read languages
The +1 to Charisma represents that humans, as a people, get along with everyone. You've got humans who get along with elves, you've got humans who get along with dwarves, you've got humans who get along with both. You have humans who will even get along with humanoids, in some circumstances. It also has the add-on effect of making humans more common in human-heavy classes, like Paladins, Druids, and Bards (even if you don't open all classes to all races, Druids and Bards are also open to half-elves). This is similar to the racial bonuses of demi-humans, but notably is not matched by a penalty elsewhere. Charisma is partially harder to powergame, but also it is a clear advantage to humans, whose other advantages might seem a little lackluster.
The +1 to all saving throws makes humans a bit more resilient, but in an unfocused way. Dwarves, gnomes, and halflings resist magic; dwarves and halflings resist poison. Elves get a significant near-immunity to sleep and charm spells. Humans... are just all-round better at every saving throw. They're lucky. They're resilient. Not in a BIG way, but in every way.
The bonus to proficiencies is that humans are adaptable and clever; this broadly maps to the combat bonuses and skills of demi-humans. A dwarf gets bonuses fighting orcs and giants; a halfling gets a bonus with any thrown weapon. Elves can sneak and find secret doors. Humans get a bonus WP, and a bonus NWP. My preference is that these can be from outside their class groups... a wizard might be proficient with a crossbow, or a fighter might find it easy to learn to read, but even limiting to within class groups can be significant. In 1e, this gets reduced in value by the fact that there's not as much in the way of non-combat skills that aren't tied to class.
And the thieving bonuses? Humans are tall, strong monkeys with a lot of languages. When climbing, we can reach handholds others can't.
