AbstractIn this paper we analyze the coevolution of segregation into private and state schools, beliefs about the educational merits of different schools, and labor market discrimination. In a dynamic model, we characterize a necessary and sufficient condition on initial levels of segregation and beliefs under which full polarization of beliefs and long-run labor market discrimination are sustainable. The model suggests a new perspective on the long-term effects of different policy interventions, such as integration, school vouchers and policies that are directly targeted toward influencing beliefs. (JEL D83, H75, I21, I24, I28, J71)
American Economic Journal: Microeconomics – American Economic Association
Published: Nov 1, 2017
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