By the content of their character? Discrimination, social identity, and observed distributions of income

Abstract

This paper applies information-theoretic measures to consider the systemic effects on individual incomes of complex patterns of social and economic discrimination by race, ethnicity, and gender in the U.S. It estimates non-parametric indices of joint, conditional or incremental, and mutual information between income, social identity, and observable economic characteristics obtained using large-scale cross-sectional data from that economy. The paper advances new conceptual and empirical approaches to the nature and measurement of economic discrimination and inequalities of opportunity, founded on the formal informativeness of measures of social identity on economic outcomes. Estimated values for indices of informational association also cast new light on the effects of the intersections of gender and race/ethnicity on income, perverse patterns in the effects of education across different groups, and a few notable dynamic changes in patterns of income distribution in that economy over the past 40 years.