Occupational Segregation in a Roy Model with Composition Preferences

We propose a model of labor market sector self-selection that combines comparative advantage, as in the Roy model, and composition preference. Two groups choose between two sectors based on heterogeneous potential incomes group compositions each sector. Potential incorporate specific human capital accumulation wage discrimination. Composition preferences are interpreted reflecting amenity well homophily aversion to minority status. show occupational segregation is amplified by we highlight resulting tension redistribution diversity. The also exhibits tipping from extreme more balanced ones. Tipping occurs when small nudge, associated with affirmative action, pushes system very different equilibrium, set equilibria changes abruptly parameter governing relative importance pecuniary crosses threshold.