Cultural Transmission, Discrimination and Peer Effects
AbstractWorkers can have good or bad work habits. These traits are transmitted from one generation to the next through a learning and imitation process which depends on parents’ investment on the trait and the social environment where children live. We show that, if a high enough proportion of employers have taste-based prejudices against minority workers, their prejudices are always self-fulfilled in steady state. Affirmative Action improves the welfare of minorities whereas integration is beneficial to minority workers but detrimental to workers from the majority group. If Affirmative Action quotas are high enough or integration is strong enough, employers’ negative stereotypes cannot be sustained in steady-state.
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Bibliographic InfoPaper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2011:3.
Length: 30 pages
Date of creation: 24 Jan 2011
Date of revision:
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Ghetto culture; overlapping generations; rational expectations; multiple equilibria; peer effects;
Find related papers by JEL classification:
- J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-30 (All new papers)
- NEP-DGE-2011-01-30 (Dynamic General Equilibrium)
- NEP-EVO-2011-01-30 (Evolutionary Economics)
- NEP-LAB-2011-01-30 (Labour Economics)
- NEP-MIG-2011-01-30 (Economics of Human Migration)
- NEP-SOC-2011-01-30 (Social Norms & Social Capital)
- NEP-URE-2011-01-30 (Urban & Real Estate Economics)
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NBER Working Papers
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