Identity and Underrepresentation: Interactions between Race and Gender

Abstract

Economic outcomes vary significantly across socio-demographic groups. In a model of multi-dimensional identity, we show how economic underrepresentation can evolve through identity-specific norms and stereotypes. Whereas standard approaches treat identity dimensions as independent, our analysis reveals deep connections between inequality and underrepresentation based on race, gender and other characteristics. `Sterilized interventions' along a single identity dimension are impossible. Interventions that aim to reduce underrepresentation along one identity dimension can increase underrepresentation along another. Underrepresentation can be eliminated along every dimension through a system of (a) self-financing subsidies or (b) role models. Subsidies need to be intersectional, whereas role-model approaches are simpler but less efficient. We identify challenges in the design of such policies, including informational, political economy and efficiency concerns. This opens up new possibilities for theoretical and empirical work on the multi-dimensionality of identity.