Job Reservation and Intergenerational Transmission of Preferences

Munich Personal RePEc Archive

Job Reservation and Intergenerational Transmission of Preferences

Chen, Hung-Ju and Sultana, Rezina

Department of Economics, National Taiwan University, Department of Economics, Indian Institute of Management Udaipur

14 March 2013

Online at https://mpra.ub.uni-muenchen.de/45036/

MPRA Paper No. 45036, posted 02 Apr 2013 04:12 UTC

b o

J R e s e r v a it o n d a n

I n t e r g e n e r a it o n a l T r a n s m i s is o n o f P r e f e r e n c e s

g n u

H -JuChen^aandRezinaSutlana^{b c,}

aDepartmen to fEconomics ,Naitona lTaiwanUniverstiy ,21Hsu-ChowRoad ,Taipe i100 ,Taiwan

bDepartmen to fEconomics ,Bar-lIanUniverstiy ,Ramat- nG 2a 5 900,I srael

cDepartmen to fEconomic,sI ndianI nsttiuteo fManagemen tUdaipur ,MLSUCampus ,Udaipu r313001 , a

i d n I

ABSTRACT : h

T i spaper examinest heeffect sof compensatory-discirminaitonpoilciesi nacaste-basedsegregated e

r e h w y m o n o c

e someh - dighp pai osiitons inacetraini ndusrtyarer eservedf o rl -owcasteinsider sa sa f

o e c n e u q e s n o

c thei mplementaiton o fthepoilcies .Cutlura latttiudest oward spreference sfo rwork- g

n i v o

l and leisure-loving rtati sevolve endogenously. The economy wli lconverge to the ef ifcien t k

r o w f o s n o it c a r f ) r e ll a m s ( r e g r a l h ti w m u ir b il i u q e ) t n e i c if f e n

i( lover samongt hei nside randoutside r s

n o it a l u p o

p fi theprofti sint hei ndusrtywtiht hepurviewoft her eservaitonpoilcy ea r sufifcienlty wl o ( hh ) ig ort heproftisi nt hei ndusrtywtihoutt hepurviewoft her eservaitonpoilcy ea r suf ifcienltyhigh

) w o

l( . Changes in thedegree o fcompensatory-discirminaiton poilcies wli laffec tthe dynamic sf ro .

y lt n e r e f fi d s r e d i s t u o d n a s r e d i s n i

: s d r o w y e

K Castes ystem,cutlura lrtansmission, jobr eservaitons n

o it a c if is s a l c L E

J : A12 ,C62,J 71

t n e m e g d e l w o n k c

A :Wearehighlyi ndebted t o AryeL .Hillmanand Hille lRapopor tfort hericomment s .s

n o it s e g g u s d n

a We also thank David de la Croix, uS -h Hua Chen, Juilo Davilla ,Fabio Mairani and i

c it r a

p pant sat t he2013 CEANAannua lmeeitngand t he2012 Annua lConferenceoft heAssociaiton o f m

o n o c E c il b u

P icTheoryfo rhelpfu lcomments and suggesitons .Thefris tautho rwould ilket ot hankt he t

S n o it a z il a b o l G r o f m a r g o r P e h t y b d e d i v o r p t r o p p u s l a i c n a n

if udie satt heI nsttiutef o rAdvancedStudie s t

a s e it i n a m u H n

i theNaitona lTaiwanUniverstiy .Theusua ldisclaime rappile .s

Correspondingauthor .Depatrmen to fEconomics ,IndianI nsttiuteo fManagemen tUdaipur ,MLSUCampus , a

i d n I , 1 0 0 3 1 3 r u p i a d

U ;Te.l :+919610333507 ;emali :rezinas.utlana@iimu.aci.n(R .Sutlana).

.

1 Introduc iton e

h t h ti

W inten t o f compensaitng the presen t generaiton s o f backward groups fo r pas t e

c it s u j n i d n a n o it a n i m ir c s i

d affrimaitveaciton ro compensatory-discirminaiton poilcie shave U

e h t e k il s e ir t n u o c e m o s n i d e t n e m e l p m i n e e

b ntied States ,South Afirca ,Malaysia ,Brazli , .

a k n a L i r S d n a , a i d n I , a ir e g i

N A large numbe ro fstudie sinvesitgate thi spoilcy in vairou s .s

t x e t n o

c ¹ M ost o fthe theoreitca lstudie sexplore the impac to faffrimaitve aciton in a f

o k r o w e m a r

f jobdiscirminaitono rwagedisc irminaitonr elyingont het heo ire so ftaste-based n

o it a n i m ir c s i

d o rstaitsitca ldiscirminaiton.^{2, 3}Therei showeve rnop iro rstudy, t o t hebes to f r

u

o knowledge ,which examine s ti srole i n shaping preference sfo rworking atttiudeand ti s y

rt s u d n i n i e g n a h c l a r u t c u rt s e h t n o t c e f f

e .Thi spape ris t herefore an attemp tto asses sthe y

r o t a s n e p m o c e h t f o t c a p m

i -disc irminaitonpoilcy- thecaste-basedr eservaitonsi nI ndia– no c

i m o n o c

e growth t hrough t he channel sofintergeneraitona l rtansmission fo working atttiude d

n

a thes rtuctura lchangei ni ndusrty. TheI ndiancasei satlhought hei nsttiuitona lbackground y

l p p a s n o i s u l c n o c e h t , y d u t s r u o f

o inp irnciplemoregenerally. n

a i d n I e h

T Hindu caste system consist sof fou rdisitnc tsocia lclasse s(called Varna ) d n a e c n a n i m o d c i m o n o c e , e g it s e r p o t g n i d r o c c a r e d r o l a c i h c r a r e i h a n i d e g n a r r a e r a h c i h w

l a n o it a c u d

e p irvlieges .In t he pre-compensatory sdi cirminaiton regime, t he l ow-castegroup, y

h c r a r e i h e t s a c e h t f o m o tt o b e h t t a d e c a l

p , had denied access t o educaiton and good j ob .s⁴ e

h

T castesystem i showeverl egislated ou to fexistencei n 1951 ,shorlty atferi ndependence , e

t s a c f o n o it c u d o rt n i e h t t u

b -based "reservaitons" t(he quota simposed in the legislature , t

n e m n r e v o

g -sponsored educaitona linsttiuiton sand pubilcsectorj obs )by t hegovernmen to f t

a d e m i a h c i h w , a i d n

I combatitng caste-based inequailites , ha s fu trhe r reinforced caste o

s n i s e it it n e d

i cia landpoilitcall fie(MendelsohnandVicziany ,1998).⁵Thi spape rfocuse son e

h

t compensatory-discirminaitonjobr eservaitonpoilcy.

1Tummala( 1999 )explainst her aitonalebehindt hi spoilcyandevaluate sti sconsequencesi nI ndia,t heU.S .and ,

e l p m a x e r o f e e s o s l A . a c ir f A h t u o

S Sowel l(2004 )and Weisskop f(2004) ,fo ra wolrdwide compairson o f .

y c il o p n o it c a e v it a m ri f f

a Fo ranoverviewo fstudie sonaffrimaitveacitoni nt heU.S .context ,seeHolze rand k

r a m u e

N (2000 )andonIndiancaste-basedr eservaiton,s s eeHaqandOjha( 2010.)

2Taste-based discirminaiton theory i spioneered by Becker (1957) and staitsitca ldiscirminaiton theory i s y

b d e i d u t s y ll a it i n

i Phelps( 1972)andArrow(1973).

3Fo rthe theoreitca lmodel sonaffrimaitve aciton inthi svein ,see fo rexample ,Welch (1976) ,Mligromand ,

) 7 8 9 1 ( r e t s

O Kahn(1991) ,Lundberg( 919 1) ,CoateandLoury( 1993).

4Thel -owcastegroupconsists o fScheduledCaste sandScheduledTirbes (deifnedunde raritcle366ofIndia’ s )

n o it u ti t s n o

C .

5Since1989t he ils to fbeneifciaire so freservaiton poilcyha sbeenexpanded i ncludingt he"Othe rBackward )

s C B O (

"

s e s s a l

C belongingt odfiferen tcaste sandcommuniite swhoseposiitonwa smarginallybettert hant ha t r

e w o l e h t f

o -castegroupbu tworset hant ha toft hehigher-castegroup.

C iritc ssay tha tcompensatory-discirminaiton poilcie sdo no thave desried effec teven n

e m e l p m i s ti f o s e d a c e d x i s r e tf

a taiton. The beneifciaire so fthi spoilcy are the poilitcally y

e h t r o ) 3 0 0 2 , e d n a P ( s p u o r g l u f r e w o

p cluste ra tthe uppe rincome end so fthe l -ow caste p

u o r

g (Aikara ,1996) .Prevalent caste-gap i n earning ha sbeen attirbuted to discrepanciesi n s

y h p d n a n a m u

h ica lcaptia lpossession s(Deshpande ,2001 ;Borooah ,2005 )andt odfiference s r e tt a l e h t , ) 6 0 0 2 , a m ij i K ( s p u o r g e t s a c t n e r e f fi d y b d e c a f s e r u t c u rt s n o it a r e n e g e m o c n i n i

n

i sinuaitngcaste-baseddiscirminaitoni nt hel abou rmarket . e

t s a c n o s e i d u t

S -based j ob discirminaiton have drawn an increasing atteniton in the e h t r e v o l l a s e c a r d n a r e d n e g s s o r c a n o it a n i m ir c s i d t e k r a m r u o b a l n o e r u t a r e ti l e v i s a v r e p

. d lr o

w ⁶Major focu so fresearch ha sbeen o n explaining adverse discirminaiton t owards t he s

e t s a c r e w o

l . Owing to a lack o fcaste network externaltiy in the informa lsecto rhighe -r a

p yi gn jobs( Munsh iand Rosenzweig ,2006)and lowexpectaiton so faccessing t ogood j ob s )

9 0 0 2 , o tI

( ,thel ow-castemember susuallyendupwtihl owe - arp yi gn sjob . it

a v r e s e r t n e r r u c e h

T on po ilcy ha s beneftied the low-caste agent s in the sense o f r

a l u g e r f o e r a h s a m e h t g n i d r o f f

a salaired and wage employmen tin the pubilc sector .T he y

c il o p n o it a v r e s e r f o w e i v r u

p ha sbeenexcludedi nt hep irvates ectori nI ndias incet he1950s . t

n e c e

R ly ,there ha sbeen a lo to fdebate o n the need o f extendi ng job reservaiton sfo rthe d

e g a t n a v d a s i

d groups t o t he p irvatesector .Howeve,r t hi sproposa lha snot been upheld yb e e w t e b n o it a t n o r f n o c l a c it il o p a d e s u a c s a h d n a s c i m e d a c a e m o s d n a y rt s u d n i e t a r o p r o

c n a

rt s u d n i e h t d n a s s a l c l a c it il o p e h t f o n o it c e

s yl eaders(Bhambh ir ,2005 ;Thorat ,2005) .P irvate y

rt s u d n

i contendst hatforcing t hem t o hriei ncompeten tworker swli lresutli n an inef ifcien t s

i h t d n a r o b a l f o n o it a c o ll

a , in t urn, wli lreduceproducitvtiie sand compeititvenes so ffrim s d

n

a therebyhampe reconomicgrowth. d

n e rt y c il o p s i h t g n i w o ll o

F we analyze the issue by studying how the compensatory- c

il o p n o it a n i m ir c s i

d y i mpactson economicgrowth i ftherequriemen tof j ob reservaiton ha s d

e il p p a n e e

b tot hep irvatesector. Reservaitonpoilcyi smodelleda saconsrtain tonemploye r h

g i h e h t n i s e c a l p e m o s e v r e s e r o t m e h t g n ir i u q e

r -paid job s wtih a relaxaiton in the

w o l e h t r o f t r o f f e k r o w f o t n e m e ri u q e

r -caste. W tih job reservaitons ,worker sfrom dfiferen t t

u b s e g a w l a u q e o t s s e c c a n a e v a h s p u o r g e t s a

c wtih d fiferen twork effo trs. ⁷ There is e

r o f e r e h

t a percepiton of an unequa l dist irbuiton o f job oppo truniites , skewed to the

6See fo rexample ,Bane jree and Knigh t(1985) ,Borooah e tal .(2007) ,Madheswaran and Attewel l(2007) , .l

a t e ) 9 0 0 2 ( o tI , ) 7 0 0 2 ( ll e w e tt A d n a t a r o h

T7Atlhoughou rmodeli sbasedonaspecia lfeatureo fIndiancaste-basedreservaitonpoilcy ,conclusion shave y

ti li b a c il p p a r e d a o r

b int hesenset hat affrimaitveacitoni nt heUScontextporrtay ssimlia rstiuaitonwhent he f

a e h t li fl u f o t r e d r o n i s e it ir o n i m e h t r o f d r a d n a t s d e ri u q e r e h t r e w o l s r e y o l p m

e frimaitveacitonconsrtain ton

m e h

t o fassigni ngtheworkersf romdfiferen tgroupst ohighlyr ewardedjob satt hes amer ate.

f o e g a t n a v d

a lowercastes .Thesamewageratewhichf alist oaccountf o rdfiferen tlevel s fo tr

o f f

e onworki sperceiveda sunfari .Thi sunfarines smaygeneratedisutlitiyamongthehigh- e

h t e r a p m o c y e h t n e h w s r e k r o w e t s a

c mselves ot et wh l -o casteworkersexeritnglowe reffo trs , e

v a h t u

b thesameearnings. Theunfarinesscaused by sre ervaiton poilcy mayalsodistor tthe h

g i

h -casteparents 'decision r egardingt hesociailzaitoneffor to f rtansmtiitngworking atttiude o

t theri chlidren.⁸ O ru attemp tto evaluate the impac to fthe job reservaiton poilcy on e

c n e r e f e r

p o fworkingatttiude racos scaste scan thereforemakeani mpo tran tcontirbu itont o e

h t w o h g n i d n a t s r e d n

u workingatttiudepreferencedynamic scanmovet heeconomyt oward s n

a ef ifcien tequiilb irum. e

W adoptthef rameworko fcutlura lrtansmissiono fpreference sdevelopedbyBisinand f

l e s ti h c i h w , ) 1 0 0 2 , 8 9 9 1 ( r e i d r e

V bulid s on populaiton dynamic s model s o f cutlura l o

i c o S d n a y g o l o p o r h t n A y r a n o it u l o v E n i d e p o l e v e d n o i s s i m s n a

rt -biology (Cavalil-Sforza-

d y o B ; 1 8 9 1 , n a m d l e

F -Richerson , 1985 ) and on the work on sociailzaiton by Coleman (1994 .) ⁹ Individual s acqurie dfiferen t preference s through sociailzaiton , and the g n o l e h t n i s e m o c t u o m u ir b il i u q e t n e r e f fi d o t s d a e l s m r o n l a i c o s t n e r e f fi d f o n o it a z il a n r e t n i

. n u

r Following the argumen to fBisin and Verdier ,the cu tlura l rtansmission o f'working 'e

d u ti tt

a preference swtihin a caste group wli lbe deifned a sthe deilberate inculcaiton by x

e g n it a u l a v e n i s e c n e r e f e r p n w o r i e h t e s u o h w s t n e r a p l a n o it a

r -ante well-being o fthei r

. n e r d li h c

w , r e p a p s i h t n

I e develop an ovelrapping generaitons mode l(OLG )wtih a frim-agen t d

n a s n o it a t c e p x e l a n o it a r , n o it a l e

r cutlura l rtansmission o fworking atttiude preferences. A t ,

d o ir e p h c a

e mfri s, when matched wtih t hepopulaiton so fin isders(a l ow-castegroup)who a

t o u q d e v r e s e r a o t d e lt it n e e r

a and outsiders(ahigh-castegroup)whodono thaveanacces s s

a t o u q h c u s o

t , sh a to assign an employmen tsrtategyto t heagent so feach group .Agent so f s

e p y t o w t f o e b n a c s p u o r g r e d i s t u o d n a r e d i s n

i o fpreferences :work-loving and leisure- g

n i v o

l and respecitvely makehigh a nd loweffo tr son work .Frimscan allocateagentst o t he s

e ir t s u d n

i wtih and wtihoutt hepurview ofr eservaitonpoilcy. eR served j ob scausedisutlitiy

8 xE peirmen tconductedbyHof fandPandey( 2006)suggests tha ttheexpectaiton so funfarines sont hebasi so f y

ti t n e d i e t s a

c undermine the low-caste individuals ’ moitvaiton to perform well . Wtih compensatory- n

o it a n i m ir c s i

d poilcies ,farines sconcerni showeverr aisedbyt hehighe rcastes ,a sclaimedbyt hi spape.r

9A sshowni nt hecutlura lrtansmissionl tierature ,preference sandnorm so fbehaviour ,whichareotfenf ormed 7

0 0 2 , l a d i V d n a t r o p o p a R ( m s i u rt l a y

b ;Chen ,2009 ,2010) , oc operaiton(Bisine ta.l ,2004)andenvy(Teraij , .s

n o it a r e n e g n i h ti w d n a s s o r c a s n o it c a r e t n i h g u o r h t d e tt i m s n a rt e r a , ) 7 0 0

2 Fo ran overview o fltierature on

.) 8 0 0 2 ( r e i d r e V d n a n i s i B e e s , n o i s s i m s n a rt l a r u tl u

c Explainingt he emergenceandl ongrunsurviva lo fsome fl

e s l a u d i v i d n i o t r e t n u o c n u r y lt n e r a p p a e s o h t f o n o it u c e x e e h t n e h w n e v e s m r o

n -interes tha sbecomeoneoft he

u tl u c y b d e s s e r d d a s e u s s i t n a tr o p m

i ra lrtansmissionmodels( Bisine ta.l ,2004).

r o

f the high-effor tmaking outsiders toward sthe comparaitvely low-effo tr making insider s t

g n i v a

h hes ameearnings. n o s e u l a v l a r u tl u

C workingatttiudeare rtansmittedviaparenta leffo tr .Thei ncenitve so f e

h t e p a h s o t s t n e r a p r e d i s t u o d n a r e d i s n

i preference so fworking atttiude so fthei rchlidren e

h t n o y lt c e ri d , e c n e h , d n a s r o t c a f c i m o n o c e n o d n e p e

d expected payoff sunde rdfiferen t

e i g e t a rt

s s mof fri s .The parents 'sociailzaiton decision i showeve rin lfuenced by perceived t

n e g a r e d i s n i e s u a c e B . s e y e n w o r i e h t h g u o r h t d e r e tl if y ti li t

u s wtih leisure-loving rtai thav ea

f o e c n a h

c being assigned to h - digh p ai posiitonsunder t he reservaiton poilcy a nd thi shu trs t

n e g a r e d i s t u

o s wtihwork-loving rtai,t t heperceived utlitiyvaire sno tonlyacros stheagent s h

ti

w dfiferen twork effo trs ,bu talso acros sdfiferen tgroups .Cutlura lpreferences fo working u

ti tt

a d eare t herefore dfiferen tamong i nside rand outside rparents ;and among parent swtih t

n e r e f fi

d rtatis. p e h

T arents ,being raitonal ,choose thei rsociailzaiton effo tr sopitmally in response to I

. n o it a l u p o p e h t n i s e c n e r e f e r p f o n o it u b ir t s i d e h t n i s e g n a h

c n paritcular ,the parent sin

, e v a h ) n o it a l u p o p e h t f o y ti r o j a m o t n o m m o c s i t i a rt ' s t n e r a p , . e .i ( p u o r g l a r u tl u c y ti r o j a m

n w o r i e h t o t n e r d li h c r i e h t e z il a i c o s o t t r o f f e t r e x e o t s e v it n e c n i r e w o l , s u b ir a p s ir e t e c

r o n i m n i s t n e r a p o t d e r a p m o c s a s e c n e r e f e r

p tiy cutlura lgroup ,since ' obilque rtansmission ' )

y t e i c o s e h t y b n o it a z il a i c o s

( i sasubsttiutef or' veritca l rtansmission'(sociailzaitoni nsidet he )

y li m a

f . In o ur model ,the distirbu iton o fpreferences toward sworking atttiudes evolve y

l s u o n e g o d n

e and le ad to a stable inteiro r steady state , specfiying a heterogeneou s r

o f s e c n e r e f e r p f o n o it u b ir t s i

d working atttiude in the populaiton , thereby providing a g

n o l e h t f o n o it c i d e r

p -run economic pefrormance .Ou rmode lsetitng allow sust o rtace t he f

o s c i m a n y

d insider sandoutsider sundervaryingcondiitons . t

a h t w o h s s tl u s e r e h

T there exist two stable equiilb ira :an e'f ifcien tequiilb irum' wtih f

o s n o it c a r f e g r a

l work-loving agent samong the inside rand outside rpopulaiton sand an 'inef ifcien tequiilb irum' tiw hlargefraciton so fleisure-lovinginside rand outside ragent .s We

t a h t d n

if proftisin the industires w tih and wtihout job reservaiton sare the mos timpo tran t t

n a n i m r e t e

d s fo thel ong-run economicpefrormance. Thisi sbecauset heseprofti swli laffec t if sr ’ m decision son labo rallocaiton between industires ,which wli lin turn affec tparents’

n o s tr o f f e n o it a z il a i c o

s shaping thei rch lidren’ sworking atttiudes .T hehigh proftisf orf rim s h

ti w y rt s u d n i n

i job reservaiton (o rthe low profti s fo rfrim s in indusrty wtiho ut job n

o it a v r e s e

r )willi nducef rimst oallocateworkersi n indusrtywtihjobr eservaiton .Therefore , e

r u s i e l h t o

b -loveri nside randoutside rparent shaves rtongi ncenitvest o rtansmtit hei r rtatist o r

i e h

t chlidren ,causing theeconomy t o converget o t heinef ifcientequiilb irum .If t heprofti s

n i s m ri f r o

f indusrty wtihjobr eservaiton arel ow(ort heproftisf orf rimsi ni ndusrtywtihou t n

o it a v r e s e r b o

j areh )igh ,t hestiuaiton wli lber eversedandtheeconomy wli lconverget ot he u

q e t n e i c if f

e iilb irum.

d n a s r e d i s n i r o f s c i m a n y d e h t t c e f f a y c il o p n o it a v r e s e r e h t f o e e r g e d e h t n i s e g n a h C

. y lt n e r e f fi d s r e d i s t u

o Adecreasei nt hedegreeoft her eservaitonpoilcyreduces theoutsiders’ y

ti li t u s i

d fromworking wtihi nsidersi n i ndusrty wtih j ob r eservaiton, t hereby increasi ng the s

e v it n e c n

i f orwork-loving outside rparentst o rtansmtit hei r rtatit ot hei rchlidren ,which can e

h t d a e

l dynamic sfo routsider sconverget o t heefifcien tequiilb irum. On t heothe rhand ,an j

d e v r e s e r f o l e v e l e h t n i e s a e r c n

i ob smay preven tthe dynamic sfo rinsider sfrom being m

u ir b il i u q e t n e i c if f e n i e h t n i d e p p a

rt . T his ifnding seems unreasonable ta a fris tglance e

s u a c e

b the highe r leve lo freserved quotawli lcauseal arger distoriton i n l aborallocaiton. The high level fo reserved job stha traises the chance so foffeirng h - digh p ai posiitons to

r e d i s n

i smaking low effo tr s dten s to i nduce t heleisure-loving inside rparentsi n rtansmtiitng n

e r d li h c r i e h t o t t i a rt n w o r i e h

t and undermines the moitvaiton o fwork-loving outside r tr

o f f e t r e x e o t s t n e r a

p s ont hei rchlidrensociailzaiton t othesame rt ai.tBotheffect swli lpush d n i h e b e c r o f g n i v ir d e h t , r e v e w o H . m u ir b il i u q e t n e i c if f e n i e h t o t e g r e v n o c o t y m o n o c e e h t

e h

t convergencet ot heefifcien tequiilb irumwhen t hel eve lofr eservedj obsi shighi sfrims’ s

e c u d e r s b o j d e v r e s e r f o l e v e l e h t n i e s a e r c n i n A . y g e t a rt

s frims ’profti sobtained i n indusrty

h ti

w job r eservaiton and i nducesf rimst o allocateagentsto i ndusrtywtihou tjob r eservaiton . s

i h

T structura lchange in indusrty wil l push the economy to converge to the ef ifcien t m

u ir b il i u q

e . Therefore , thi s pape r also provide s an atlernaitve explanaiton why y

r o t a s n e p m o

c -discirminaiton poilcie sm ay no tgeneratedesried effectsand dfiferen tdegree s e

h t f

o reservaiton poilcy may cause very dfiferen tlong-run economic pefrormance sfo r s

r e d i s t u o d n a s r e d i s n

i .

n o it c e s t x e n e h T . s w o ll o f s a d e z i n a g r o s i r e p a p e h t f o t s e r e h

T descirbe sthe mode l

. g n it t e

s Seciton3analysest hei nside randoutside ragents 'opitma lsociailzaitoneffor tchoice. ,

4 n o it c e s n

I w e analyze the frim' sop itma lemploymen tsrtategy .Seciton 5 present sthe s

r e d i s t u o d n a s r e d i s n i e h t r o f s c i m a n y d e c n e r e f e r

p unde rdfiferen tpoilcy expectaiton .s In 6

n o it c e

s ,convergencet ot heef ifcien tand i nef ifcien tequiilb irai sdescirbedandt hestab litiy d

e n i m a x e e r a s n o it i d n o

c undert hreepossibles tiuaitons .The ifnals ecti onconclude .s