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Ethnic Competition and Specialization

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  • Kahanec, Martin

    (Central European University)

Abstract

Are ethnic specialization and thus a downward sloping labor demand curve fundamental features of labor market competition between ethnic groups? In a general equilibrium model, this paper argues that spillover effects in skill acquisition and social distances between ethnic groups engender equilibrium regimes of skill acquisition that differ in their implications for ethnic specialization. Specifically, fundamental relationships through which relative group sizes determine whether ethnic specialization arises and in what degree are established. Thus, this paper theoretically justifies a downward sloping labor demand curve and explains why some ethnic groups earn more than others, ethnic minorities underperforming or outperforming majorities.

Suggested Citation

  • Kahanec, Martin, 2007. "Ethnic Competition and Specialization," IZA Discussion Papers 3167, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3167
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    File URL: https://docs.iza.org/dp3167.pdf
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    References listed on IDEAS

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    1. Grant, James H & Hamermesh, Daniel S, 1981. "Labor Market Competition among Youths, White Women and Others," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 354-360, August.
    2. Buhai, I. Sebastian & van der Leij, Marco J., 2023. "A Social Network Analysis of Occupational Segregation," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    3. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
    4. Munshi, Kaivan, 2004. "Social learning in a heterogeneous population: technology diffusion in the Indian Green Revolution," Journal of Development Economics, Elsevier, vol. 73(1), pages 185-213, February.
    5. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
    6. Barak D. Richman, 2006. "How Community Institutions Create Economic Advantage: Jewish Diamond Merchants in New York," Palgrave Macmillan Books, in: Roman Grynberg & Letsema Mbayi (ed.), The Global Diamond Industry, chapter 2, pages 44-86, Palgrave Macmillan.
    7. Phelps, Edmund S, 1972. "The Statistical Theory of Racism and Sexism," American Economic Review, American Economic Association, vol. 62(4), pages 659-661, September.
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    Citations

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    Cited by:

    1. Kahanec, Martin & Zimmermann, Klaus F., 2008. "International Migration, Ethnicity and Economic Inequality," IZA Discussion Papers 3450, Institute of Labor Economics (IZA).
    2. Zimmermann, Klaus F. & Kahanec, Martin & Constant, Amelie F. & DeVoretz, Don J. & Gataullina, Liliya & Zaiceva, Anzelika, 2008. "Study on the Social and Labour Market Integration of Ethnic Minorities," IZA Research Reports 16, Institute of Labor Economics (IZA).
    3. Zimmermann, Klaus F. & Kahanec, Martin, 2008. "Migration, the Quality of the Labour Force and Economic Inequality," CEPR Discussion Papers 6899, C.E.P.R. Discussion Papers.
    4. Martin Kahanec & Anzelika Zaiceva & Klaus F. Zimmermann, 2011. "Ethnic Minorities in the European Union: An Overview," Chapters, in: Martin Kahanec & Klaus F. Zimmermann (ed.), Ethnic Diversity in European Labor Markets, chapter 1, Edward Elgar Publishing.
    5. Andrén, Daniela, 2012. "Romanians, Hungarians and their wages, in transition, in Romania," Economic Modelling, Elsevier, vol. 29(6), pages 2673-2685.
    6. Andrén, Daniela, 2010. ""In every rank, or great or small, ’Tis industry supports us all": Romanians and ethnic Hungarians, and their wages, in transition," Working Papers 2010:1, Örebro University, School of Business.

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    More about this item

    Keywords

    ethnic specialization; labor market; ethnic group; human capital; spillover effects;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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