How inequality hurts growth: Revisiting the Galor–Zeira model using the Korean case

Bogang Jun, Mary Kaltenberg and Won‐Sik Hwang

Pacific Economic Review, 2022, vol. 27, issue 1, 56-79

Abstract: This paper aims to show that the level of inequality increases via the human capital channel, with credit market imperfections generating negative effects on economic growth. We expand the model presented by Galor and Zeira (Galor and Zeira, Review of Economic Studies, 1993, 60, 35–52) to represent the fact that the economy benefits from endogenous technological progress and that the government provides financial aid to reduce the financial hurdles for human capital accumulation. We use Korean data from 1998 to 2008 to empirically confirm that education plays a significant role in the divergence of household wealth over time and that the government's financial aid the form of the new student loans programme positively influences equality and short‐run economic growth by promoting the number of skilled workers.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/1468-0106.12356

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:pacecr:v:27:y:2022:i:1:p:56-79

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1361-374X

Access Statistics for this article

Pacific Economic Review is currently edited by Kenneth S. Chan and Yin-wong Cheung

More articles in Pacific Economic Review from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().