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Cultural Transmission and Discrimination

  • Saez-Marti, Maria

    ()

    (IUI - Research Institute of Industrial Economics)

  • Zenou, Yves

    ()

    (Stockholm University)

Each worker belongs to either the majority or the minority group and, irrespective of the group she belongs to, 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' purposeful investment on the trait and the social environment where children live. In a segregated society, 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 without affecting majority workers 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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1880.

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Length: 31 pages
Date of creation: Dec 2005
Publication status: published in: Journal of Urban Economics, 2012, 72 (2-3), 137-146
Handle: RePEc:iza:izadps:dp1880
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