A dynamic model of education level choice: Application to brazilian states

Wilfredo Maldonado (), Isabel M. Marques and Osvaldo C. da Silva Filho
Authors registered in the RePEc Author Service: Osvaldo Candido

Revista Brasileira de Economia - RBE, 2012, vol. 66, issue 2

Abstract: An empirical analysis of the education level / wage curve in the Brazilian states shows the S-shape of that function. When introducing that function in a dynamic programming problem of schooling choice, a non-concave problem arises and we may find multiplicity of stationary state equilibria. Some of them present local stability. This may explain the persistence of several education levels in the long run of the economy and as a consequence it results the poverty trap. We also analyze the sensitivity of the stationary states to changes in the education cost in order to evaluate the impact of public educational policies.

Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:epgrbe:v:66:y:2012:i:2:a:3050

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