We develop a dynamic model that can explain identity switching activities among a stereotyped population, such as passing and selective out-migration, based on the group reputation model developed in Kim and Loury (2008). The more talented members of the population, who gain more by separating...

We explore the combined effect of segregation in social networks, peer effects, and the relative size of a historically disadvantaged group on the incentives to invest in market-rewarded skills and the dynamics of inequality between social groups. We identify conditions under which group...