IDEAS home Printed from https://ideas.repec.org/p/iek/wpaper/1309.html
   My bibliography  Save this paper

A Theory of Group Inequality

Author

Listed:
  • Seung Han Yoo

    (Department of Economics, Korea University, Seoul, Republic of Korea)

Abstract

This paper offers a model in which there is direct competition between different groups. We deliberately endow an environment with many employers and workers in which opportunities are limited such that each employer is randomly matched with two workers from the entire worker population, which consists of two ex ante identical sub-groups, and selects at most one of them. We show that with the competition, a set of feasible equilibria has a con.ict structure unlike the conflict-free structure found in typical statistical discrimination models, and that we can find employers' strategy such that employers benefit from discrimination, and this strategy can be sustained as a collusion between employers and an advantaged group in a repeated game.

Suggested Citation

  • Seung Han Yoo, 2013. "A Theory of Group Inequality," Discussion Paper Series 1309, Institute of Economic Research, Korea University.
    • Handle: RePEc:iek:wpaper:1309
    as

    Download full text from publisher

    File URL: http://econ.korea.ac.kr/~ri/WorkingPapers/w1309.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lawrence E. Blume, 2005. "Learning and Statistical Discrimination," American Economic Review, American Economic Association, vol. 95(2), pages 118-121, May.
    2. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1001-1026.
    3. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162, September.
    4. Kevin Lang & Michael Manove & William T. Dickens, 2005. "Racial Discrimination in Labor Markets with Posted Wage Offers," American Economic Review, American Economic Association, vol. 95(4), pages 1327-1340, September.
    5. Shubham Chaudhuri & Rajiv Sethi, 2008. "Statistical Discrimination with Peer Effects: Can Integration Eliminate Negative Stereotypes?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(2), pages 579-596.
    6. Moro, Andrea & Norman, Peter, 2004. "A general equilibrium model of statistical discrimination," Journal of Economic Theory, Elsevier, vol. 114(1), pages 1-30, January.
    7. Larry Samuelson & George J. Mailath & Avner Shaked, 2000. "Endogenous Inequality in Integrated Labor Markets with Two-Sided Search," American Economic Review, American Economic Association, vol. 90(1), pages 46-72, March.
    8. Drew Fudenberg & David M. Kreps & Eric S. Maskin, 1990. "Repeated Games with Long-run and Short-run Players," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(4), pages 555-573.
    9. Stiglitz, Joseph E, 1973. "Approaches to the Economics of Discrimination," American Economic Review, American Economic Association, vol. 63(2), pages 287-295, May.
    10. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mialon, Sue H. & Yoo, Seung Han, 2017. "Incentives for discrimination," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 141-160.
    2. Gustavo Saraiva Frio & Daniel De Abreu Pereira Uhr & Júlia Gallego Ziero Uhr & Paulo De Andrade Jacinto, 2018. "Oferta De Trabalho E Orientação Sexual: Evidências Para O Brasil," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 168, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Yuki, Kazuhiro, 2012. "Stereotypes, segregation, and ethnic inequality," MPRA Paper 39704, University Library of Munich, Germany.
    4. Hanming Fang & Andrea Moro, 2010. "Theories of Statistical Discrimination and Affirmative Action: A Survey," NBER Working Papers 15860, National Bureau of Economic Research, Inc.
    5. Balazs Szentes & Marcin Pęski, 2012. "Spontaneous Discrimination," Working Papers 2012-005, Becker Friedman Institute for Research In Economics.
    6. Ramiro Rodríguez Revilla, 2013. "Equidad Laboral para Mujeres Mayores de 40 Años en Colombia," CEDLAS, Working Papers 0144, CEDLAS, Universidad Nacional de La Plata.
    7. Bruno Decreuse & Linas Tarasonis, 2021. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Annals of Economics and Statistics, GENES, issue 143, pages 105-136.
    8. Clémence Berson, 2016. "Local labor markets and taste-based discrimination," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-21, December.
    9. Samuel Bowles & Glenn C. Loury & Rajiv Sethi, 2014. "Group Inequality," Journal of the European Economic Association, European Economic Association, vol. 12(1), pages 129-152, February.
    10. Gilat Levy & Ronny Razin, 2017. "The Coevolution of Segregation, Polarized Beliefs, and Discrimination: The Case of Private versus State Education," American Economic Journal: Microeconomics, American Economic Association, vol. 9(4), pages 141-170, November.
    11. Lagerlöf, Johan N.M., 2020. "Strategic gains from discrimination," European Economic Review, Elsevier, vol. 122(C).
    12. Rajesh Ramachandran & Christopher Rauh, 2018. "Discrimination without taste: how discrimination can spillover and persist," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 9(3), pages 249-274, August.
    13. Luca Flabbi, 2010. "Gender Discrimination Estimation In A Search Model With Matching And Bargaining," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 745-783, August.
    14. Wu, Bao & Liu, Zijia & Gu, Qiuyang & Tsai, Fu-Sheng, 2023. "Underdog mentality, identity discrimination and access to peer-to-peer lending market: Exploring effects of digital authentication," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    15. Bruno Decreuse & Linas Tarasonis, 2016. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Working Papers halshs-01327961, HAL.
    16. Conde-Ruiz, J. Ignacio & Ganuza, Juan José & Profeta, Paola, 2022. "Statistical discrimination and committees," European Economic Review, Elsevier, vol. 141(C).
    17. Kim, Young Chul, 2009. "Lifetime Network Externality and the Dynamics of Group Inequality," MPRA Paper 18767, University Library of Munich, Germany.
    18. Lepage, Louis Pierre, 2020. "Endogenous learning and the persistence of employer biases in the labor market," CLEF Working Paper Series 24, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    19. Johan N. M. Lagerlöf, 2016. "Strategic Gains from Labor Market Discrimination," Discussion Papers 16-03, University of Copenhagen. Department of Economics.
    20. Kim, Young Chul & Loury, Glenn, 2009. "Group Reputation and the Dynamics of Statistical Discrimination," MPRA Paper 18765, University Library of Munich, Germany.

    More about this item

    Keywords

    Statistical discrimination; Group inequality; Asymmetric information;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iek:wpaper:1309. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kim, Jisoo (email available below). General contact details of provider: https://edirc.repec.org/data/ierkukr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.