Essays on statistical discrimination in a dynamic framework

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  • March 21, 2019
Creator
  • Glawtschew, Rebecca M.
    • Affiliation: College of Arts and Sciences, Department of Economics
Abstract
  • This dissertation consists of two papers in the field of statistical discrimination. In the first paper, I determine the potential causes of persistent labor market inequality by developing a dynamic model of statistical discrimination in a competitive environment. In this dynamic model, the forward-looking behavior of economic agents determines the dynamic paths to the steady states. By characterizing these dynamic paths, I am able to establish the initial conditions that can lead to each steady state and to determine if it is possible to move from one steady state to another. I find that the model can be broken down into two classes of parameterizations. In the first class, history alone determines the final outcome. In the second class, the expectations of forward-looking may agents determine the final outcome. In both of these cases, moving from one steady state to another is not possible. Using a simplified version of the dynamic model, I also examine how the parameter values impact both the existence of multiple steady states and the importance of expectations in determining the final outcome. In the second paper, I consider the effectiveness of three government policies designed to eliminate persistent statistical discrimination in the framework of the dynamic model developed in the first paper. I determine the paths that workers will take after a policy is instated as well as how long a policy needs to be in place to guarantee the successful elimination of discrimination. The policies I consider are (1) a hiring subsidy that promotes the hiring of disadvantaged workers to the better job, (2) an investment voucher that defrays the monetary cost of human capital investment, and (3) an equal treatment policy under which firms are required to treat workers equally across groups. I find that all three policies have the potential to eliminate persistent discrimination if certain conditions are met.
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  • In Copyright
Note
  • ... in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Economics.
Advisor
  • Norman, Peter
Degree granting institution
  • University of North Carolina at Chapel Hill
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