Dynamics of Social Norms in the City

We study how in a city either opposite social norms remain or a particular code of behavior spreads and ultimately prevails. We develop a multicommunity model with overlapping generations. When young, an individual chooses the level of educational effort. The crucial feature is that her decision is influenced by peers living in the area who favor either a social norm valuing education or a social norm discrediting education. When an adult, an individual who cares about her offspring’s expected income chooses the family’s location. Endogenous location leads to different patterns of social norms in the city. We identify two types of urban equilibrium: a culturally-balanced city where social norms are distributed evenly among urban areas and the rate of education is the same in each urban area and a culturally-divided city where urban areas oppose on their prevailing social norm and exhibit different rates of education. We then study the dynamics of social norms. We show that there are multiple long-run patterns of social norms. A particular steady state is achieved depending on the initial distribution of social norms support in the population. Finally, we show that the public policies promoting social integration can lead in the long run to a population unanimously discrediting education and getting less education than letting the culturally-divided city arise.