Stereotypes, segregation, and ethnic inequality

Yuki, Kazuhiro (2013): Stereotypes, segregation, and ethnic inequality.

Abstract

Disparities in economic conditions among different ethnic, racial, or religious groups continue to be serious concerns in most economies. Relative standings of different groups are rather persistent, although some groups initially in disadvantaged positions successfully caught up with then-advantaged groups. Two obstacles, costly skill investment and negative stereotypes or discrimination in the labor market, seem to distort investment and sectoral choices, give rise to skill and labor market segregations by ethnicity, and slow down the progress of disadvantaged groups.

How do these obstacles affect skill investment and sectoral choices of different groups and the dynamics of their economic outcomes and inter-group inequality? Is affirmative action necessary to significantly improve conditions of subordinate groups, or redistributive policies sufficient? In order to tackle these questions, this paper develops a dynamic model of statistical discrimination and examines how initial economic standings of groups and initial institutionalized discrimination affect subsequent dynamics and long-run outcomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: ethnic or racial inequality; statistical discrimination; labor market segregation; skill investment
• Subjects: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J62 - Job, Occupational, and Intergenerational Mobility; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; J - Labor and Demographic Economics > J7 - Labor Discrimination > J71 - Discrimination; J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants ; Non-labor Discrimination; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

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