Sorting and Long-Run Inequality

Raquel Fernandez () and Richard Rogerson ()

No 7508, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many social commentators have raised concerns over the possibility that increased sorting in a society can lead to greater inequality. To investigate this we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to match several basic empirical findings. Contrary to Kremer's (1997) finding of a basically insignificant effect of marital sorting on inequality, we find that increased marital sorting will significantly increase income inequality. Three factors are central to our findings: a negative correlation between fertility and education, a decreasing marginal effect of parental education on children's years of education, and wages that are sensitive to the relative supply of skilled workers.

JEL-codes: D3 I2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge
Date: 2000-01
Note: EFG LS
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Related works:
Working Paper: Sorting and Long-Run Inequality (2000)
Working Paper: Sorting and Long-Run Inequality (1999)
Journal Article: Sorting And Long-Run Inequality (2001)
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