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Group Inequality

Author

Listed:
  • Samuel Bowles

    (Santa Fe Institute and University of Siena)

  • Glenn C. Loury

    (Department of Economics, Brown University)

  • Rajiv Sethi

    (Department of Economics, Barnard College, Columbia University and the Institute for Advanced Study)

Abstract

This paper explores conditions under which inequality across social groups can emerge from initially group-egalitarian distributions and persist across generations despite equality of eco- nomic opportunity. These conditions arise from interactions among three factors: the extent of segregation in social networks, the strength of interpersonal spillovers in human capital accumu- lation, and the responsiveness of relative wages to the skill composition in production. Social segregation is critical in generating these results: group inequality cannot emerge or persist un- der conditions of equal opportunity unless segregation su¢ ciently great. We also show that if an initially disadvantaged group is su¢ ciently small, integration above a threshold level can induce both groups to invest more in human capital, while the opposite holds if the disadvantaged group is large.

Suggested Citation

  • Samuel Bowles & Glenn C. Loury & Rajiv Sethi, 2009. "Group Inequality," Economics Working Papers 0088, Institute for Advanced Study, School of Social Science.
    • Handle: RePEc:ads:wpaper:0088
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    Cited by:

    1. Kappius, Robert, 2011. "Equal opportunity in educational contexts: Comparing the feasibility of divergent conceptualizations," The Constitutional Economics Network Working Papers 02-2011, University of Freiburg, Department of Economic Policy and Constitutional Economic Theory.
    2. Rohini Somanathan, 2016. "Group Inequality in Democracies: Lessons from Cross-national Experiences," Working papers 260, Centre for Development Economics, Delhi School of Economics.
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    5. Pritha Dev & Blessing U. Mberu & Roland Pongou, 2016. "Ethnic Inequality: Theory and Evidence from Formal Education in Nigeria," Economic Development and Cultural Change, University of Chicago Press, vol. 64(4), pages 603-660.
    6. Dionissi Aliprantis & Daniel R. Carroll, 2018. "Neighborhood dynamics and the distribution of opportunity," Quantitative Economics, Econometric Society, vol. 9(1), pages 247-303, March.
    7. Patrick Mason, 1992. "The divide-and-conquer and employer/ employee models of discrimination: Neoclassical competition as a familial defect," The Review of Black Political Economy, Springer;National Economic Association, vol. 20(4), pages 73-89, June.
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    9. Kim, Young Chul, 2009. "Lifetime Network Externality and the Dynamics of Group Inequality," MPRA Paper 18767, University Library of Munich, Germany.
    10. Gioia De Melo, 2011. "Peer effects identified through social networks. Evidence from Uruguayan schools," Department of Economics University of Siena 627, Department of Economics, University of Siena.
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    12. Kim, Young Chul, 2009. "Group Reputation and the Endogenous Group Formation," MPRA Paper 18575, University Library of Munich, Germany.
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    18. Mario Piacentini, 2008. "Migration Enclaves, Schooling Choices and Social Mobility," Development Working Papers 265, Centro Studi Luca d'Agliano, University of Milano.
    19. Kim, Young Chul & Loury, Glenn, 2009. "Group Reputation and the Dynamics of Statistical Discrimination," MPRA Paper 18765, University Library of Munich, Germany.
    20. Frances Stewart, "undated". "Horizontal Inequalities: A Neglected Dimension of Development," QEH Working Papers qehwps81, Queen Elizabeth House, University of Oxford.
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    25. Rajiv Sethi & Muhamet Yildiz, 2012. "Public Disagreement," American Economic Journal: Microeconomics, American Economic Association, vol. 4(3), pages 57-95, August.

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    More about this item

    Keywords

    segregation; networks; group inequality; human capital;
    All these keywords.

    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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