() and Yves Zenou
Thierry Verdier: DELTA-ENS, Postal: 48 boulevard Jourdan, 75014 Paris, France
Yves Zenou: The Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Abstract: This paper provides a unified explanation for why blacks commit more crime, are located in poorer neighborhoods and receive lower wages than whites. If everybody believes that blacks are more criminal than whites - even if there is no basis for this - then blacks are offered lower wages and, as a result, locate further away from jobs. Distant residence increases even more the black-white wage gap because of more tiredness and higher commuting costs. Blacks have thus a lower opportunity cost of committing crime and become indeed more criminal than whites. Therefore beliefs are self-fulfilling.
39 pages, October 21, 2003
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