Signalling equilibrium, Intergenerational mobility and long-run growth

Lakshmi Raut ()

GE, Growth, Math methods from EconWPA

Abstract: This paper provides a signalling model of endogenous growth in which innate talents and education levels of workers drive the basic scientific knowledge and adoptive knowledge accumulation processes. Whether talented individuals get properly educated and are employed in the appropriate technical sectors are determined by the perfectly competitive employers' beliefs about the relationship between talent and education level. Innate talent of a worker is a private knowledge and it is distributed independent of the individual's family backgrounds; education level of workers act as a signalling device for talents as well as it improves their productivities; the family backgrounds and talents of workers determine their optimal education level, which in turn determines the degree of social mobility. The model generates multiple balanced growth paths which differ in the degree of intergenerational social mobility and growth rate. The paper analyzes policies that generate equilibrium paths with higher social mobility, growth in income and Pareto superior allocations.

Keywords: Signaling Equilibrium; Social Mobility; Endogenous Growth (search for similar items in EconPapers)
JEL-codes: J62 D3 D9 (search for similar items in EconPapers)
Date: 1996-03-19
Note: Type of Document - Postscript; prepared on IBM PC - PC-TEX; to print on PostScript; pages: 19 ; figures: included. We never published this piece and now we would like to reduce our mailing and xerox cost by posting it.
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpge:9603002

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