Human capital Kuznets curve with subsistence consumption level

Miki Matsuo and Yasunobu Tomoda

Economics Letters, 2012, vol. 116, issue 3, 392-395

Abstract: We examine the human capital Kuznets curve in a simple model that does not assume increasing returns to scale in human capital formation. With a utility function that specifies a subsistence consumption level, consumption is a necessary good and education is a luxury good. As the children of poor households receive a low level of education, the gap in human capital endowments expands between poor and rich households. Eventually, economic development increases income and expenditure for education, and income inequality declines.

Keywords: Human capital; Kuznets curve; Subsistence consumption level; Luxury goods (search for similar items in EconPapers)
JEL-codes: O15 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:116:y:2012:i:3:p:392-395

DOI: 10.1016/j.econlet.2012.04.012

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