This paper develops a model of social interactions and endogenous poverty traps. The key idea is captured in a framework in which the likelihood of future social interactions with members of one's group is partly determined by group-specific investments made by individuals. I prove three main...

The literature on statistical discrimination shows that ex-ante identical groups may be differentially treated in discriminatory equilibria. This paper constructs a dynamic model of statistical discrimination and explores what happens to the individuals who nonetheless overcome the initial...

We develop an index of segregation based on two premises: (1) a measure of segregation should disaggregate to the level of individuals, and (2) an individual is more segregated the more segregated are the agents with whom she interacts. We present an index that satisfies (1) and (2) and that is...

Employment or admission “goals†are often preferred to affirmative action as a way of obtaining diversity. By constructing a simple model of employerâ€auditor interaction, I show that when an auditor has imperfect information regarding employers’ proclivities to discriminate...