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Group Inequality

Author

Listed:
  • Samuel Bowles

    () (Santa Fe Institute and University of Siena)

  • Glenn C. Loury

    () (Department of Economics, Brown University)

  • Rajiv Sethi

    () (Department of Economics, Barnard College, Columbia University and the Institute for Advanced Study)

Abstract

This paper explores conditions under which inequality across social groups can emerge from initially group-egalitarian distributions and persist across generations despite equality of eco- nomic opportunity. These conditions arise from interactions among three factors: the extent of segregation in social networks, the strength of interpersonal spillovers in human capital accumu- lation, and the responsiveness of relative wages to the skill composition in production. Social segregation is critical in generating these results: group inequality cannot emerge or persist un- der conditions of equal opportunity unless segregation su¢ ciently great. We also show that if an initially disadvantaged group is su¢ ciently small, integration above a threshold level can induce both groups to invest more in human capital, while the opposite holds if the disadvantaged group is large.

Suggested Citation

  • Samuel Bowles & Glenn C. Loury & Rajiv Sethi, 2009. "Group Inequality," Economics Working Papers 0088, Institute for Advanced Study, School of Social Science.
  • Handle: RePEc:ads:wpaper:0088
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    Cited by:

    1. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    2. Dionissi Aliprantis & Daniel R. Carroll, 2012. "Neighborhood dynamics and the distribution of opportunity," Working Paper 1212, Federal Reserve Bank of Cleveland, revised 01 Feb 2013.
    3. Michael D. Carr & Arjun Jayadev, 2015. "Relative Income and Indebtedness: Evidence from Panel Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(4), pages 759-772, December.
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    5. Rohini Somanathan, 2016. "Group Inequality in Democracies: Lessons from Cross-national Experiences," Working papers 260, Centre for Development Economics, Delhi School of Economics.
    6. Lily Hu & Yiling Chen, 2017. "A Short-term Intervention for Long-term Fairness in the Labor Market," Papers 1712.00064, arXiv.org, revised Feb 2018.
    7. Lopez-Rodriguez, Patricia & De la Torre Garcia, Rodolfo, 2000. "Closing the gap: the link between social capital and microfinance services," MPRA Paper 22974, University Library of Munich, Germany, revised Jun 2009.
    8. Ana Figueiredo, 2017. "Uncertainty in education: The role of communities and social learning," 2017 Meeting Papers 529, Society for Economic Dynamics.
    9. Hanson, Steven D. & Robison, Lindon J., 2001. "Impacts Of Social Capital On Investment Behavior Under Risk," Staff Paper Series 11533, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    12. Mario Piacentini, 2008. "Migration Enclaves, Schooling Choices and Social Mobility," Development Working Papers 265, Centro Studi Luca d'Agliano, University of Milano.
    13. Kim, Young Chul, 2009. "Lifetime Network Externality and the Dynamics of Group Inequality," MPRA Paper 18767, University Library of Munich, Germany.
    14. Kim, Young Chul & Loury, Glenn, 2009. "Group Reputation and the Dynamics of Statistical Discrimination," MPRA Paper 18765, University Library of Munich, Germany.
    15. Pritha Dev & Blessing U. Mberu & Roland Pongou, 2016. "Ethnic Inequality: Theory and Evidence from Formal Education in Nigeria," Economic Development and Cultural Change, University of Chicago Press, vol. 64(4), pages 603-660.
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    18. Alexandre, Michel, 2011. "Endogenous categorization and group inequality," MPRA Paper 33239, University Library of Munich, Germany.
    19. Jane Glover, 2010. "Capital Usage in Adverse Situations: Applying Bourdieu’s Theory of Capital to Family Farm Businesses," Journal of Family and Economic Issues, Springer, vol. 31(4), pages 485-497, December.
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    More about this item

    Keywords

    segregation; networks; group inequality; human capital;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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