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How Much Does Sorting Increase Inequality?

  • Michael Kremer

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."

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5566.

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Date of creation: May 1996
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Publication status: published as Quarterly Journal of Economics (February 1997): 15-139.
Handle: RePEc:nbr:nberwo:5566
Note: EFG
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