This paper presents the structural estimation of a statistical discrimination
model. Although the model is capable of displaying multiple equilibria, an estimation
strategy that identifies both the parameters of the model and the equilibrium chosen
by the economic agents is developed and empirically implemented. A comparison between
the equilibria that were selected in the economy over time and the other potential
equilibria reveals that the decline in wage inequality experienced in the U.S. economy
in the last thirty years cannot be attributed to changes in the equilibrium selection.
Moro, Andrea. "The effect of statistical discrimination on black-white wage inequality: estimating a model with multiple equilibria,"
International Economic Review 44(2),
pp. 467-500, May
title = "The effect of statistical discrimination on black-white wage inequality: estimating a model with multiple equilibria",
author = "Moro, Andrea",
year = "2003",
month = " May",
journal = "International Economic Review",
number = "2",
volume = "44",
pages = "467-500",
url = "https://andreamoro.net/assets/papers/the_effect_of_statistical_discrimination_on_black-white_wage_inequality.pdf"