Working Paper: NBER ID: w9904
Authors: David Austensmith; Roland G. Fryer Jr.
Abstract: This paper formalizes a sociological phenomenon entitled 'acting white'. The key idea is that individuals face a tension between signaling their type to the outside labor market and signaling their type to a peer group: signals that induce high wages can be signals that induce peer rejection. We prove three basic results: (1) there exists no equilibria in which all types of individuals adopt distinct educational investment levels; (2) when individuals are not too patient, all equilibria satisfying a standard refinement involve a binary partition of the type space in which all types accepted by the group pool on a common low education level and all types rejected by the group separate at distinctly higher levels of education with correspondingly higher wages; and (3) when individuals are very patient, there is an increase in the variation of education levels within the group and an increase in the variance of types deemed acceptable by the group. The more those involved discount the future, the more salient peer pressure becomes and the more homogenous groups become.
Keywords: Peer pressure; Educational investment; Social dynamics; Racial inequality; Acting white
JEL Codes: D8; J0; I2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Academic success (I23) | Social ostracism among black adolescents (Z13) |
| Peer pressure (C92) | Educational choices (I21) |
| Peer dynamics (C92) | Educational investment decisions (I26) |
| Increased patience (D15) | Greater variation in education levels within the group (I24) |