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Cultural transmission and discrimination

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  • Maria Sáez-Martí
  • Yves Zenou

Abstract

Workers can have good or bad work habits. These traits are transmitted from one generation to the next through a learning and imitation process, which depends on parents' investment in the trait and the social environment where children live. We show that if a sufficiently high proportion of employers have taste-based prejudices against minority workers, their prejudices are always self-fulfilled in steady state and minority workers end up having, on average, worse work habits than majority workers. This leads to a ghetto culture. Affirmative Action can improve the welfare of minorities whereas integration can be beneficial to minority workers but detrimental to workers from the majority group.

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Bibliographic Info

Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 348.

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Date of creation: Dec 2007
Date of revision: Apr 2012
Handle: RePEc:zur:iewwpx:348

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Keywords: Ghetto culture; overlapping generations; rational expectations; multiple equilibria; peer effects;

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