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Belief Flipping in a Dynamic Model of Statistical Discrimination

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Roland G. Fryer, Jr.

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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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12174.

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Date of creation: Apr 2006
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Handle: RePEc:nbr:nberwo:12174

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J7 - Labor and Demographic Economics - - Labor Discrimination

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  1. Paul A. Grout & In-Uck Park & Silvia Sonderegger, 2007. "An Economic Theory of the Glass Ceiling," The Centre for Market and Public Organisation 07/183, Department of Economics, University of Bristol, UK. [Downloadable!]
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This page was last updated on 2008-8-19.

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