Will Affirmative-Action Policies Eliminate Negative Stereotypes?

A key question concerning affirmative action is whether the labor-market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market. We argue that this depends on how the policy affects employers' beliefs about the productivity of minority workers. We...

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Bibliographic Details
Published in:The American economic review 1993-12, Vol.83 (5), p.1220-1240
Main Authors: Coate, Stephen, Loury, Glenn C.
Format: Article
Language:English
Subjects:
Affirmative action
Cost allocation
Economic models
Economic theory
Effects
Employers
Employment
Employment discrimination
Gender discrimination
Group identity
Productivity
Stereotypes
Studies
Subsidies
Wages
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Summary:A key question concerning affirmative action is whether the labor-market gains it brings to minorities can continue without it becoming a permanent fixture in the labor market. We argue that this depends on how the policy affects employers' beliefs about the productivity of minority workers. We study the joint determination of employer beliefs and worker productivity in a model of statistical discrimination in job assignments. We prove that, even when identifiable groups are equally endowed ex ante, affirmative action can bring about a situation in which employers (correctly) perceive the groups to be unequally productive, ex post.
ISSN:0002-8282
1944-7981