Sorting, education, and inequality

Individuals sort in a variety of fashions. The workplace, the school of one's child, the choice of neighborhood in which to reside, and the selection of a spouse are all important arenas in which a choice of peers and access to particular goods and networks is explicitly or implicitly made. The aim of this chapter is to review the subset of the literature in the rapidly growing field of education and inequality that is primarily concerned with how individuals sort and the consequences of this for the accumulation of human capital, equity, efficiency, and welfare. At first blush, sorting may seem like a rather strange lens through which to examine education. After all, this field has been primarily concerned with examining issues such as the returns to education, the nature of the education production function, or, at a more macro level, the relationship between education and per capita output growth. A bit more thought, though, quickly reveals that sorting is an integral component of these questions. With whom one goes to school or works, who one's neighbors are, and who is a member of one's household are all likely to be important ingredients in determining both the resources devoted to and the returns to human capital accumulation. It is interesting to note that in all these spheres there is at least some evidence indicating that sorting is increasing in the United States.