I re-examined another set of old posts, in the light of this interesting tidbit from David Balan:
4. Bryan Caplan suggests that statistical discrimination is at least mitigated, and possibly eliminated, by the fact that high-attribute individuals in groups with low average attributes have an incentive to "counter-signal" by taking some action to show that they are in fact high attribute. It is true that the possibility of counter-signalling will mitigate the harm from statistical discrimination, but I don't see how it can ever make it go away.For example, the ill effects of prevalent low-level racism could conceivably be mitigated by a positive consequence, namely that individual blacks might have additional incentives to accomplish something excellent and thereby distinguish themselves from the (statistically undesirable) run of the mill.
Two years ago I wrote:
... people are not so easily fooled. One of the highest hurdles for a black man or woman to overcome, when entering the workplace, is the widely held suspicion that perhaps he has been the beneficiary of placement beyond his qualifications. This prejudice is going to be even harder to eradicate than the racism of fifty years ago, because it has an ineluctable truth behind it -- and even if that cause is removed, the suspicion will taint every potential past beneficiary for a generation. The government lacks the power to make people ignore this -- it is swimming upstream, and the current does not slacken.
Such is the lasting legacy of affirmative action.
I think these words are directly relevant to Mr. Balan's point; the presence of affirmative action programs defeats the productive counter-signalling for which Mr. Caplan hopes. In fact, attempts at such signalling are actively undermined, and the signals of accomplishment will be least respected by exactly those -- namely, employers engaged in statistical discrimination -- whose approbation is most needed.