Education, Neighbourhood Effects and Growth: An Agent Based Model Approach

Tanya Vianna de Araújo () and Miguel St. Aubyn ()

No 2005/10, Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

Abstract: Endogenous, ideas-led, growth theory and agent based modelling with neighbourhood effects literature are crossed. In an economic overlapping generations framework, it is shown how social interactions and neighbourhood effects are of vital importance in the endogenous determination of the long run number of skilled workers and therefore of the growth prospects of an economy. Neighbourhood effects interact with the initial distribution of educated agents across space and play a key role in the long run stabilisation of the number of educated individuals. Our model implies a tendency towards segregation, with a possibly positive influence on growth, if team effects operate. The long run growth rate is also shown to depend on the rate of time preference. Initial circumstances are of vital importance for long run outcomes. A poor initial education endowment will imply a long run reduced number of skilled workers and a mediocre growth rate, so there no economic convergence tendency. On the contrary, poor societies will grow less, or will even fall into a poverty trap, and will diverge continuously from richer ones.

Keywords: agent modelling; economic growth; education; human capital; neighbourhood effects; poverty trap. (search for similar items in EconPapers)
JEL-codes: I20 J24 O41 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-geo, nep-soc and nep-ure
Date: 2005
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Related works:
Journal Article: EDUCATION, NEIGHBORHOOD EFFECTS AND GROWTH: AN AGENT-BASED MODEL APPROACH (2008)
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