Endogenous categorization and group inequality
Abstract
Purpose
The purpose of this paper is to analyze the impact of categorization endogeneity (CE), meant as the influence of endogenous elements (e.g. behavioral traits) in group categorization, in the persistence of group inequality.
Design/methodology/approach
The author integrates economic and sociological elements in a dynamic model of human capital accumulation by phenotypically distinct individuals. Both kinds of elements are influenced by the degree of CE.
Findings
Effect of CE in the incentive of members of dominated groups to accumulate human capital is twofold: it allows them to pass as belonging to the dominant group but, on the other hand, it reduces the social pay-off stemming from such behavior, as they may be “expelled” from the reference group by their peers. It is found that, under sufficiently low levels of discrimination, CE widens the range of values of the neighborhood effects parameter for which group inequality is stable.
Originality/value
Despite the endogeneity of categorization has been explored in other studies, this is the first one which argues that this element may underpin, under certain conditions, group inequality regarding human capital accumulation. The results presented here sheds some light on real-world issues, as the nature of neighborhood effects, the role of segregation on the maintenance of racial inequality and public policies to combat group inequality.
Keywords
Acknowledgements
This paper benefited from comments from Samuel Bowles, Edoardo Gaffeo, Paolo Pin, Paolo Vanin and Giulio Zanella. All remaining errors are the author’s own.
Citation
Alexandre, M. (2015), "Endogenous categorization and group inequality", International Journal of Social Economics, Vol. 42 No. 3, pp. 276-295. https://doi.org/10.1108/IJSE-10-2013-0220
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited