Theoretical Approaches in Stratification Economics

We review new developments in formal theory as applied to racial stratification. Across this literature, we discuss how discrimination produces benefits for advantaged groups at a cost to marginalized groups, how groups resolve conflicts between individual and collective interests, how direct discrimination is transformed into persistent inequality, and the implications of these forces for racial disparities, efficiency, and social welfare. For researchers active in Stratification Economics, we highlight parallels between intuitions about dimensions of racial discrimination and inequality developed by SE and insights from formal models by theorists outside SE. For formal theorists interested in working on questions of race and inequality, we provide an overview of how SE conceptualizes racial stratification and identify open questions where formal theory can provide more rigorous micro-foundations to these intuitions.