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How Much Does Sorting Increase Inequality?

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  • Michael Kremer

Abstract

Social commentators from William Julius Wilson to Charles Murray have argued that increased sorting of people into internally homogeneous" neighborhoods,schools, and marriages is spurring long-run inequality. Cali- bration of a formal model suggests that these fears are misplaced. In order to increase the steady-state standard deviation of education by one percent, the correlation between neighbors' education would have to double, or the correlation between spouses' education would have to increase by one-third. In fact, both correlations have declined slightly over the past few decades. Sorting has somewhat more significant effects on intergenerational mobility than on inequality."

Suggested Citation

  • Michael Kremer, 1996. "How Much Does Sorting Increase Inequality?," NBER Working Papers 5566, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5566
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    Cited by:

    1. Mercado, Alejandro F. & Andersen, Likke Eg & Brooks, Alice J., 2005. "Macroeconomic Policies to Increase Social Mobility and Growth in Bolivia," Documentos de trabajo 3/2005, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    2. Lykke E. Andersen & Alice Brooks & Alejandro F. Mercado, 2004. "Macroeconomic Policies to Increase Social Mobility and Growth in Bolivia," Development Research Working Paper Series 02/2004, Institute for Advanced Development Studies.
    3. Andersen, Lykke E., 2010. "Social Mobility in Bolivia is Finally Improving!," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 13, pages 117-136.
    4. Andersen, Lykke E., 2001. "Low Social Mobility in Bolivia: Causes and Consequences for Development," Kiel Working Papers 1046, Kiel Institute for the World Economy (IfW).
    5. Lykke Andersen, 2001. "Social Mobility in Latin America: Links with Adolescent Schooling," Research Department Publications 3130, Inter-American Development Bank, Research Department.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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