Stereotypes, segregation, and ethnic inequality

Kazuhiro Yuki

MPRA Paper from University Library of Munich, Germany

Abstract: Disparities in economic outcomes among different ethnic, racial, or religious groups continue to be serious concerns in most economies. Relative economic 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 discriminations in the labor market, seem to distort investment and sectoral decisions and slow down the economic progress of the disadvantaged. How do these obstacles affect skill investment and sectoral choices of individuals of different groups and the dynamics of their economic outcomes and inter-group inequality? Is affirmative action necessary to significantly improve conditions of the disadvantaged, 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.

Keywords: ethnic or racial inequality; statistical discrimination; labor market segregation; skill investment (search for similar items in EconPapers)
JEL-codes: J15 J24 J31 J62 J71 O17 (search for similar items in EconPapers)
Date: 2012-06-28
New Economics Papers: this item is included in nep-dem and nep-ure
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https://mpra.ub.uni-muenchen.de/51085/8/MPRA_paper_51085.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:39704

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