If race or ethnicity is endogenous in certain circumstances, a self-identity may or may not be selected to distance oneself from a subordinate group or to improve one’s standing with or acceptance into the dominant group.

Racial and ethnic self-identification have economic consequences because the choice of self-identity is likely to be entwined with the acceptance of and acculturation into dominant social norms. If race or ethnicity is endogenous in certain circumstances, a self-identity may or may not be selected to distance oneself from a subordinate group or to improve one’s standing with or acceptance into the dominant group. In a study of people of Mexican descent, Mason (2001) tests a model in which acculturation is a dominant strategy, and finds that light-complected people of Mexican descent may acculturate more easily. Murguia and Telles (1996) report different educational opportunities for Mexicans of light and dark complexion and argue that these may result from conscious choices. Phenotypic differences, they argue, influence individual strategies. Light-skinned people of Mexican descent learn early in life that by assimilating or acculturating they can defuse negative stereotypes and attain more than their dark-complected counterparts. Later in life, light-skinned Mexicans are able to increase their incomes by adopting a non-Hispanic white identity (Mason 2001). Yet there may also be situations in which members of the subordinate group decide to maintain identities separate from the dominant group.

Howard Bodenhorn and Christopher S. Ruebeck, “The Economics of Identity and the Endogeneity of Race,” National Bureau of Economic Research: Working Paper 9962 (September 2003): 3-4.

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