Social background effects on school and job opportunities

This paper proposes a theory on how students’ social background affects their school attainment and job opportunities. I study a set-up where students differ in ability and social background, and I analyse the interaction between a school and an employer. Students with disadvantaged background are penalised compared to other students: they receive less teaching and/or are less likely to be hired. A surprising result is that policy aiming to subsidise education for disadvantaged students might in fact decrease their job opportunities.