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Skill Uncertainty and Social Inference

18 Pages Posted: 29 Jan 2007  

Robert J. Oxoby

University of Calgary - Department of Economics; IZA Institute of Labor Economics

Date Written: January 2007

Abstract

Research in psychology indicates that individuals often make inferences regarding unknown individual qualities based on potentially irrelevant (but socially observable) information. This paper explores occupational choices when individuals receive imprecise signals regarding ability and use the observable characteristics of previously successful individuals to infer own ability. Individuals who fail to observe successful predecessors of their same type may underestimate their potential for success in the occupation. We discuss the role of these biases in light of the literature on affirmative action and firm incentives.

Keywords: social Inference, occupational choice, discrimination

JEL Classification: D63, D83, J64, J70

Suggested Citation

Oxoby, Robert J., Skill Uncertainty and Social Inference (January 2007). IZA Discussion Paper No. 2567. Available at SSRN: https://ssrn.com/abstract=960018

Robert J. Oxoby (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada
403-220-2586 (Phone)
403-282-5262 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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