Belief Flipping in a Dynamic Model of Statistical Discrimination
AbstractThe literature on statistical discrimination shows that ex-ante identical groups may be differentially treated in discriminatory equilibria. This paper constructs a dynamic model of statistical discrimination and explores what happens to the individuals who nonetheless overcome the initial discrimination. If an employer discriminates against a group of workers in her initial hiring, she may actually favor the successful members of that group when she promotes from within the firm. The worker's welfare implications (i.e. who benefits from an employer's discriminatory hiring practices) are unclear. Even though agents face discrimination initially, some may be better off because of it.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 2955768.
Date of creation: 2007
Date of revision:
Publication status: Published in Journal of Public Economics
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