DP7622 Cultural Transmission and Discrimination
|Author(s):||Maria Sáez-Martí, Yves Zenou|
|Publication Date:||January 2010|
|Keyword(s):||ghetto culture, multiple equilibria, overlapping generations, peer effects, rational expectations|
|Programme Areas:||Labour Economics, Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=7622|
Workers can have good or bad work habits. These traits are transmitted from one generation to the next through a learning and imitation process which depends on parents' investment on the trait and the social environment where children live. We show that, if a high enough proportion of employers have taste-based prejudices against minority workers, their prejudices are always self-fulfilled in steady state. Affirmative Action improves the welfare of minorities whereas integration is beneficial to minority workers but detrimental to workers from the majority group. If Affirmative Action quotas are high enough or integration is strong enough, employers' negative stereotypes cannot be sustained in steady-state.