We develop a general equilibrium model of trade between identical countries. The model is similar to a 2x2x2 Heckser-Ohlin model, but the factors of production, skilled and unskilled labor, are endogenously determined from human capital investments by the workers. Firms are only able to observe...

We consider a general equilibrium model with endogenous human capital formation in which ex ante identical groups may be treated differently in equilibrium due to informational externalities. Unlike earlier models of statistical discrimination, group inequalities may arise even if the...

We consider a model of endogenous human capital formation with competitively determined wages, where discrimination between ex ante identical groups is sustainable in equilibrium. An affirmative action policy consisting of a quota may "fail" in the sense that there still may be equilibria where...

This article investigates how lack of information may bias the investigator's assessment of the presence of statistical discrimination. We show that the nature of the bias is such that statistical discrimination may be rejected in a Mincerian regression even when the data is generated from an...

We develop a general equilibrium model of trade with endogenous human capital acquisition in job specific skills and imperfectly observable skills. We show that even if there are no ex-ante fundamental differences between countries there may be equilibria under international trade with...