Heterogeneous Population, Economic Growth and Income Distribution

Nissim Ben David and Uri Ben-Zion

Journal of Social Economics, 2014, vol. 1, issue 4, 168-186

Abstract: We present an over lapping generation model with an example and a simulation of an economy that consists of three classes of workers. Agents might invest in education or capital. As people are more educated, their population growth rate is lower. The poorest class cannot borrow in order to invest in education or capital and its population is growing faster. As capital grows, educated agents can be mobilized into a state of firm owners. We show that under such conditions, while the wage per worker of the poorest class can increase, income distribution worsens as the economy grows.

Keywords: Heterogeneous Population; Economic Growth; Income Distribution (search for similar items in EconPapers)
Date: 2014
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