Working Paper: CEPR ID: DP10394
Authors: Gilat Levy; Ronny Razin
Abstract: In this paper we examine the long term effects of socialization and segregation in schools, on labour market outcomes. We incorporate a model of ?informational? peer influence by which beliefs of pupils are affected by exposure to other pupils? posterior beliefs. Specifically, we focus on the beliefs of private school graduates about the productivity of state school graduates. We incorporate this into a dynamic model of parental school choice (state versus private) and labour market decisions (whether to hire a state or a private school graduate). We provide necessary and sufficient conditions for segregation in education and discrimination in the labour market to hold.
Keywords: discrimination; education; labor market; school choice; segregation
JEL Codes: D83; I24; J7
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| peer beliefs in private schools (C92) | perceived productivity of state school graduates (J24) |
| perceived productivity of state school graduates (J24) | employers' hiring decisions (M51) |
| peer beliefs in private schools (C92) | employers' hiring decisions (M51) |
| strong negative beliefs about state school graduates (I24) | long-term segregation in education (I24) |
| strong negative beliefs about state school graduates (I24) | discrimination in the labor market (J70) |
| incorrect beliefs (D83) | educational segregation (I24) |
| educational segregation (I24) | labor market discrimination (J70) |
| peer beliefs in private schools (C92) | inefficiencies in the labor market (J49) |