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Belief Flipping in a Dynamic Model of Statistical Discrimination

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  • Fryer, Roland
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    Abstract

    The 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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    File URL: http://dash.harvard.edu/bitstream/handle/1/2955768/belief%20flipping.pdf
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    Bibliographic Info

    Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 2955768.

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    Date of creation: 2007
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    Publication status: Published in Journal of Public Economics
    Handle: RePEc:hrv:faseco:2955768

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    Cited by:
    1. Song Han, 2011. "Creditor Learning and Discrimination in Lending," Journal of Financial Services Research, Springer, vol. 40(1), pages 1-27, October.
    2. Kevin Lang & Jee-Yeon K. Lehmann, 2011. "Racial Discrimination in the Labor Market: Theory and Empirics," NBER Working Papers 17450, National Bureau of Economic Research, Inc.
    3. Lehmann, Jee-Yeon, 2011. "Job assignment and promotion under statistical discrimination: evidence from the early careers of lawyers," MPRA Paper 33466, University Library of Munich, Germany.
    4. repec:hal:wpaper:halshs-00677438 is not listed on IDEAS
    5. Thomas Breda & Son Thierry Ly, 2012. "Do professors really perpetuate the gender gap in science? Evidence from a natural experiment in a French higher education institution," PSE Working Papers halshs-00677438, HAL.

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