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Skill Uncertainty and Social Inference

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  • Oxoby, Robert J.

    (University of Calgary)

Abstract

Research in psychology indicates that individuals often make inferences regarding unknown individual qualities based on potentially irrelevant (but socially observable) information. This paper explores occupational choices when individuals receive imprecise signals regarding ability and use the observable characteristics of previously successful individuals to infer own ability. Individuals who fail to observe successful predecessors of their same type may underestimate their potential for success in the occupation. We discuss the role of these biases in light of the literature on affirmative action and firm incentives.

Suggested Citation

  • Oxoby, Robert J., 2007. "Skill Uncertainty and Social Inference," IZA Discussion Papers 2567, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2567
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    References listed on IDEAS

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    1. Manski, C.F., 1990. "Dynamic Choice In A Social Setting," Working papers 9003, Wisconsin Madison - Social Systems.
    2. Oxoby, Robert J., 2008. "Skill uncertainty and social inference," Labour Economics, Elsevier, vol. 15(3), pages 400-405, June.
    3. Lundberg, Shelly J & Startz, Richard, 1983. "Private Discrimination and Social Intervention in Competitive Labor Markets," American Economic Review, American Economic Association, vol. 73(3), pages 340-347, June.
    4. David Neumark & Harry Holzer, 2000. "Assessing Affirmative Action," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 483-568, September.
    5. Kim-Sau Chung, 2000. "Role Models and Arguments for Affirmative Action," American Economic Review, American Economic Association, vol. 90(3), pages 640-648, June.
    6. Jacob, Brian A., 2002. "Where the boys aren't: non-cognitive skills, returns to school and the gender gap in higher education," Economics of Education Review, Elsevier, vol. 21(6), pages 589-598, December.
    7. Manski, Charles F., 1993. "Dynamic choice in social settings : Learning from the experiences of others," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 121-136, July.
    8. Christopher Avery & Susan Athey & Peter Zemsky, 2000. "Mentoring and Diversity," American Economic Review, American Economic Association, vol. 90(4), pages 765-786, September.
    9. Brian A. Jacob, 2002. "Where the boys aren't: Non-cognitive skills, returns to school and the gender gap in higher education," NBER Working Papers 8964, National Bureau of Economic Research, Inc.
    10. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
    11. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
    12. Oxoby, Robert J., 2002. "Status characteristics, cognitive bias, and incentives in teams," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 31(3), pages 301-316.
    13. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
    14. Booth, Alison L & Burton, Jonathan & Mumford, Karen, 2000. "The Position of Women in UK Academic Economics," Economic Journal, Royal Economic Society, vol. 110(464), pages 312-333, June.
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    Cited by:

    1. Oxoby, Robert J., 2008. "Skill uncertainty and social inference," Labour Economics, Elsevier, vol. 15(3), pages 400-405, June.
    2. Larry L. Howard & Nishith Prakash, 2012. "Do employment quotas explain the occupational choices of disadvantaged minorities in India?," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(4), pages 489-513, August.
    3. Peter, Frauke H. & Zambre, Vaishali, 2017. "Intended college enrollment and educational inequality: Do students lack information?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 60, pages 125-141.
    4. Oxoby, Robert J., 2014. "Social inference and occupational choice: Type-based beliefs in a Bayesian model of class formation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 51(C), pages 30-37.

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    More about this item

    Keywords

    occupational choice; social Inference; discrimination;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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