PA5023: Stratification Economics and Public Policy

Stratification economics differs from conventional neoclassical economics and its related offspring of behavioral economics because it does not assume that the nature of inequality arises solely via rational choices made in competitive markets. Rather, it posits structural and historical processes that impede the ability of marginalized groups to gain access to markets. One of the key insights from stratification economics is that conventional policy mechanisms (e.g. deterrence policies in the criminal justice system) don’t work because they fail to take account of the legacy of inequality (e.g. convict lease systems and vagrancy laws). The arguments in favor of reparations, baby bonds, universal health care can be viewed and examined using the methods and techniques of stratification economics. This course introduces students to some new methodologies that complement their training in conventional economic analysis. Topics: · A review of conventional microeconomic approaches to policy analysis, including the core assumptions and key conclusions · Summary and critique of the conventional microeconomic approach · The historical backdrop to the evolution of “identity economics” and stratification economics for understanding racial disparities · Core assumptions of stratification economics · Applications: Housing markets and residential segregation; racial profiling; discrimination in labor markets. · Policy proposals based on stratification economics – reparations, baby bonds, universal income and health payments. Advanced undergraduate students may register with permission of the instructor.

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