On social segregation and economic inequality

Julie Rehmeyer reviews in sciencenews
the recent paper Is equal opprtunity enough? A theory of persistent group inequality by Sam Bowles, Glen Loury and Rajiv Sethi. Excerpts from the review;
"...the power of segregation may be even greater than commonly thought. The study shows that even when there is no history of discrimination between two groups, social segregation alone can cause dramatic economic inequities to develop.
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They imagined a situation in which discrimination that had historically existed between two groups of people came to an end, so that people from both groups who had equal skills subsequently began earning equal wages. The researchers then asked whether, over many generations, the income of the two groups would tend to equalize or whether the disparity would persist.

The model incorporated the idea that parents tend to invest more heavily in giving their children the skills that employers value when they expect that investment to pay off later in higher wages. It also included the fact that children are more likely to succeed when they are surrounded by other children who are succeeding. For example, studies show that having friends with strong vocabularies helps a child to pick up more words with less effort.

The latter effect makes informal, social segregation particularly damaging, the researchers found. People who have been subject to discrimination in the past are less likely to have acquired the skills needed for high-wage jobs, compared with those who were not subject to discrimination. Their children, then, are less likely to pick up those skills naturally at home. Furthermore, in a socially segregated society, children will mix mostly with peers from their own group. As a result, children from the less-advantaged group will be less able to pick up high-wage skills from their friends.

These impediments make parents' investment in their children's future wage-related skills less likely to pay off, leaving parents less inclined to make the investment than parents in a socially advantaged group. The children are thus likely to have less economic success in adulthood.

"If you have enough integration between the social networks of the two groups, the inequality will go away over generations," Sethi says, but otherwise, the inequality could get worse, the study shows.
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The positive side of the study, however, is that integration has a powerful effect in ending inequalities. "If equality between groups is a social objective," Sethi says, "the way to do it is through integration." "