Education, structural change and economic development

Pier Paolo Saviotti, Andreas Pyka and Bogang Jun

Structural Change and Economic Dynamics, 2016, vol. 38, issue C, 55-68

Abstract: In this paper we explore the role that can be played by education in economic development using a model called TEVECON. Within the population of our economic system we distinguish two different social classes which differ for their level and quality of education and, as a consequence, for their human capital, wages and income per head. We vary the investment in education as a share of total investment, the share of investment in education allocated to each social class, and the quality of education each class receives. We show that while education can exert a positive effect on social mobility by increasing the population share of the upper social class it also leads to a tradeoff between income inequality and the rate of growth of income. These results are obtained based only on education and do not take into account any wealth effects.

Keywords: Education; Development; Income distribution; Co-evolution (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:38:y:2016:i:c:p:55-68

DOI: 10.1016/j.strueco.2016.04.002

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