Sunday, July 19, 2009

Why the consequences of past discrimination persist over generations

I just read President Obama's most recent speech on race. It is another extraordinary speech--his ability to be at once sophisticated and accessible never ceases to amaze me.

To oversimplify, the speech has two themes: that individuals, whether discriminated against or not, must take control of their owns lives as best they can, but that the legacy of Jim Crowe will not go away quickly--that there are structural conditions in society that to place impediments in the paths of success for minority children.

The point reminded me of an award winning thesis by Kate Antonovics I read while I was at Wisconsin. One of the papers she generated from the thesis has the following summary:

Thus, initially disadvantaged groups may become trapped even though there is always a
unique within-generation equilibrium. That is, in contrast to standard models of statistical discrimination, repeated coordination failures are not needed to generate persistent discrimination.

Rather, statistical discrimination changes the transmission of earnings across generations by leading parents’ investment behavior to depend upon the distribution of income in the parents’ racial group. Thus, statistical discrimination and racial inequality are self-reinforcing, and multiple equilibria can arise.


When parents have limited resources to invest in their children, it becomes harder for children to migrate to a higher income class than their parents. In a world that was truly characterized by equal opportuntiy, children's fortures would be independent of their parents. We should at least strive to move to the point where children's fortunes are independent of their parents' race.

2 comments:

prashant said...

good tips,


Work from home

poker said...

Rather, statistical discrimination changes the transmission of earnings across generations by leading parents’ investment behavior to depend upon the distribution of income in the parents’ racial group.