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Skill Uncertainty and Social Inference

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  • Oxoby, Robert J.

    ()
    (University of Calgary)

Abstract

Research in psychology indicates that individuals often make inferences regarding unknown individual qualities based on potentially irrelevant (but socially observable) information. This paper explores occupational choices when individuals receive imprecise signals regarding ability and use the observable characteristics of previously successful individuals to infer own ability. Individuals who fail to observe successful predecessors of their same type may underestimate their potential for success in the occupation. We discuss the role of these biases in light of the literature on affirmative action and firm incentives.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2567.

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Length: 18 pages
Date of creation: Jan 2007
Date of revision:
Publication status: published in: Labour Economics, 2008, 15 (3), 422-427
Handle: RePEc:iza:izadps:dp2567

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Keywords: occupational choice; social Inference; discrimination;

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References

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  1. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, American Economic Association, vol. 62(4), pages 659-61, September.
  2. Coate, S. & Loury, G.C., 1992. "Will Affirmative Action Policies Eliminate Negative Stereotypes?," Papers, Boston University - Department of Economics 3, Boston University - Department of Economics.
  3. Harry Holzer & David Neumark, 1999. "Assessing Affirmative Action," NBER Working Papers 7323, National Bureau of Economic Research, Inc.
  4. Rabin, Matthew, 1997. "Psychology and Economics," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  5. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, American Economic Association, vol. 73(3), pages 340-47, June.
  6. Susan Athey & Christopher Avery & Peter Zemsky, 1998. "Mentoring and Diversity," NBER Working Papers 6496, National Bureau of Economic Research, Inc.
  7. Oxoby, Robert J., 2002. "Status characteristics, cognitive bias, and incentives in teams," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 31(3), pages 301-316.
  8. Manski, C.F., 1990. "Dynamic Choice In A Social Setting," Working papers, Wisconsin Madison - Social Systems 9003, Wisconsin Madison - Social Systems.
  9. Manski, Charles F., 1993. "Dynamic choice in social settings : Learning from the experiences of others," Journal of Econometrics, Elsevier, Elsevier, vol. 58(1-2), pages 121-136, July.
  10. Michael R. Pergamit & Jonathan R. Veum, 1999. "What is a promotion?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(4), pages 581-601, July.
  11. Oxoby, Robert J., 2008. "Skill uncertainty and social inference," Labour Economics, Elsevier, Elsevier, vol. 15(3), pages 400-405, June.
  12. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, American Economic Association, vol. 90(3), pages 640-648, June.
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Cited by:
  1. Howard, Larry L. & Prakash, Nishith, 2011. "Do Employment Quotas Explain the Occupational Choices of Disadvantaged Minorities in India?," IZA Discussion Papers 5894, Institute for the Study of Labor (IZA).
  2. Oxoby, Robert J., 2008. "Skill uncertainty and social inference," Labour Economics, Elsevier, Elsevier, vol. 15(3), pages 400-405, June.

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