Cultural Transmission, Discrimination and Peer Effects
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 on the trait and the social environment where children live. We show that, if a high enough proportion of employers have taste-based prejudices against minority workers, their prejudices are always self-fulfilled in steady state. Affirmative Action improves the welfare of minorities whereas integration is beneficial to minority workers but detrimental to workers from the majority group. If Affirmative Action quotas are high enough or integration is strong enough, employers’ negative stereotypes cannot be sustained in steady-state.
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- Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997.
"Social Norms and Economic Incentives in the Welfare State,"
Working Paper Series
476, Research Institute of Industrial Economics.
- Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999. "Social Norms And Economic Incentives In The Welfare State," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 1-35, February.
- Assar Lindbeck & Sten Nyberg & Jörg Weibull, 2003.
"Social Norms and Welfare State Dynamics,"
CESifo Working Paper Series
931, CESifo Group Munich.
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