Ethnic Competition and Specialization

Martin Kahanec

No 3167, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Are ethnic specialization and thus a downward sloping labor demand curve fundamental features of labor market competition between ethnic groups? In a general equilibrium model, this paper argues that spillover effects in skill acquisition and social distances between ethnic groups engender equilibrium regimes of skill acquisition that differ in their implications for ethnic specialization. Specifically, fundamental relationships through which relative group sizes determine whether ethnic specialization arises and in what degree are established. Thus, this paper theoretically justifies a downward sloping labor demand curve and explains why some ethnic groups earn more than others, ethnic minorities underperforming or outperforming majorities.

Keywords: human capital; ethnic group; labor market; ethnic specialization; spillover effects (search for similar items in EconPapers)
JEL-codes: J15 J24 J70 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mig, nep-soc and nep-ure
Date: 2007-11
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