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Social Segregation and the Dynamics of Group Inequality

Author

Listed:
  • Samuel Bowles

    () (Santa Fe Institute, University of Siena and University of Massachusetts)

  • Rajiv Sethi

    () (Barnard College, Columbia University)

Abstract

We explore the dynamics of group inequality when segregation of social networks places the initially less affluent group at a disadvantage in acquiring human capital. Extending Loury (1977), we demonstrate that (i) group differences in economic success can persist across generations in the absence of either discrimination or group differences in ability, provided that social segregation is sufficiently great, (ii) there is threshold level of integration above which group inequality cannot be sustained, (iii) this threshold varies systematically but non-monotonically with the population share of the disadvantaged group, (iv) crossing the threshold induces convergence to a common high level of human capital if the less affluent population share is suf- ficiently small (and the opposite, otherwise), and (v) a race-neutral policy that reduces the cost of acquiring human capital can expand the range over which reducing segregation can be Pareto-improving. JEL Categories: D31, Z13, J71

Suggested Citation

  • Samuel Bowles & Rajiv Sethi, 2006. "Social Segregation and the Dynamics of Group Inequality," UMASS Amherst Economics Working Papers 2006-02, University of Massachusetts Amherst, Department of Economics.
  • Handle: RePEc:ums:papers:2006-02
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    File URL: http://www.umass.edu/economics/publications/2006-02.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Rajaraman, Indira, 2007. "Impact of liquor taxation on consumption patterns in India," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 195-207.
    2. Mario Piacentini, 2008. "Migration Enclaves, Schooling Choices and Social Mobility," Development Working Papers 265, Centro Studi Luca d'Agliano, University of Milano.
    3. Viáfara López Carlos Augusto & Serna Alvarado Nini Johanna, 2015. "Desigualdad de oportunidades educativas en la población de 15 a 29 años en Brasil y Colombia según autoclasificación étnico-racial," REVISTA SOCIEDAD Y ECONOMIA - CIDSE, UNIVERSIDAD DEL VALLE - CIDSE, April.
    4. Alexandre, Michel, 2011. "Endogenous categorization and group inequality," MPRA Paper 33239, University Library of Munich, Germany.

    More about this item

    Keywords

    segregation; networks; group inequality; human capital;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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