ON THE PERSISTENCE OF RACIAL-INEQUALITY

A model of the ''new growth theory'' type is applied to the persistenc e of racial income differentials in the presence of community segregat ion. When community human capital affects human capital accumulation b y individuals, differences between groups can persist indefinitely, ev en in the absence of current discrimination. Intercommunity mobility c an benefit advantaged minority workers, who leave behind an impoverish ed ghetto. Workplace integration without community integration may not lead to equality even in the long run. We examine various policies an d show that a large, temporary intervention may be successful in achie ving racial equality while a smaller permanent one fails.