Government-Mandated Discriminatory Policies
AbstractThis paper provides a simple explanation for why some minority groups are economically successful, despite being subject to government-mandated discriminatory policies. We study an economy with private and public sectors in which workers invest in imperfectly observable skills that are important to the private sector but not to the public sector. A law allows native majority workers to be employed in the public sector with positive probability while excluding the minority from it. We show that even when the public sector offers the highest wage rate, it is still possible that the discriminated group is, on average, economically more successful. The reason is that the preferential policy lowers the majority's incentive to invest in imperfectly observable skills by exacerbating the informational free riding problem in the private sector labor market
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 562.
Length: 25 pages
Date of creation: 15 Aug 2001
Date of revision:
Contact details of provider:
Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Discrimination; Informational Free Riding; Income Distribution;
Other versions of this item:
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-09-26 (All new papers)
- NEP-CDM-2001-09-26 (Collective Decision-Making)
- NEP-POL-2001-09-26 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andrea Moro & Peter Norman, .
""Affirmative Action in a Competitive Economy'',"
CARESS Working Papres
96-08, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
- Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
- George J. Borjas, 1988.
"Self-Selection and the Earnings of Immigrants,"
NBER Working Papers
2248, National Bureau of Economic Research, Inc.
- Becker, Gary S & Tomes, Nigel, 1976.
"Child Endowments and the Quantity and Quality of Children,"
Journal of Political Economy,
University of Chicago Press, vol. 84(4), pages S143-62, August.
- Gary S. Becker & Nigel Tomes, 1976. "Child Endowments, and the Quantity and Quality of Children," NBER Working Papers 0123, National Bureau of Economic Research, Inc.
- Coate, S. & Loury, G.C., 1992.
"Will Affirmative Action Policies Eliminate Negative Stereotypes?,"
3, Boston University - Department of Economics.
- Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December.
- repec:pri:indrel:403 is not listed on IDEAS
- Hanming Fang, 2001. "Social Culture and Economic Performance," American Economic Review, American Economic Association, vol. 91(4), pages 924-937, September.
- Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-50, October.
- Peter Norman, 2003. "Statistical Discrimination and Efficiency," Review of Economic Studies, Wiley Blackwell, vol. 70(3), pages 615-627, 07.
- Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-61, September.
- Jimmy Chan & Erik Eyster, 2002. "Admission Impossible? Self Interest and Affirmative Action," Economics Working Paper Archive 479, The Johns Hopkins University,Department of Economics.
- Sato, Hiroshi & Li, Shi, 2007.
"Class Origin, Family Culture, and Intergenerational Correlation of Education in Rural China,"
IZA Discussion Papers
2642, Institute for the Study of Labor (IZA).
- Sato, Hiroshi & Li, Shi, 2007. "Class Origin, Family Culture, and Intergenerational Correlation of Education in Rural China," Discussion Papers 2006-19, Graduate School of Economics, Hitotsubashi University.
- Hiroshi Sato & Li Shi, 2008. "Class Origin, Family Culture, and Intergenerational Correlation of Education in Rural China," Global COE Hi-Stat Discussion Paper Series gd08-007, Institute of Economic Research, Hitotsubashi University.
- Sato, Hiroshi & Li, Shi, 2007. "Revolution and Family in Rural China: Influence of Family Background on Current Family Wealth," IZA Discussion Papers 3223, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson).
If references are entirely missing, you can add them using this form.