Education and income inequality: The role of a social protection system

Alexandra Rillaers ()
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Alexandra Rillaers: IRES, Université catholique de Louvain, 3, Place Montesquieu, B-1348 Louvain-la-Neuve, Belgium

Journal of Population Economics, 2001, vol. 14, issue 3, 425-443

Abstract: In this paper we aim to understand the role a welfare state can play in stimulating risky but profitable activities like investment in education, and in reducing income inequality. We analyze how unemployment benefits may affect investment in education when the latter is characterized by uncertain returns. This is done in an overlapping generations model in which endogenous growth is introduced through human capital accumulation. We develop a numerical example of the model in order to reproduce some key differences between the European versus the North American economy; differences that, according to this model, result from the different degree of social protection characterizing both economies.

Keywords: Uncertainty; ·; education; ·; income; inequality (search for similar items in EconPapers)
JEL-codes: D81 H55 I29 (search for similar items in EconPapers)
Date: 2001-08-20
Note: Received: 02 June 1999/Accepted: 22 February 2000
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Citations: View citations in EconPapers (5)

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