Aspirations, Segregation, and Occupational Choice

Dilip Mookherjee, Stefan Napel and Debraj Ray

Journal of the European Economic Association, 2010, vol. 8, issue 1, 139-168

Abstract: This paper examines the steady states of an overlapping generations economy with a given distribution of household locations over a one-dimensional interval. Parents decide whether or not to educate their children. Educational decisions are affected by location: There are local complementarities in investment incentives stemming from aspirations formation, learning spillovers, or local public goods. At the same time, economy-wide wages endogenously adjust to bring factor supplies into line with demand. The model therefore combines local social interaction with global market interaction. The paper studies steady-state configurations of skill acquisition, both with and without segregation. The model is used to compare macroeconomic and welfare properties of segregated and unsegregated steady states. (JEL: D31, O15, D85) (c) 2010 by the European Economic Association.

JEL-codes: D31 D85 O15 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (41)

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Working Paper: Aspirations, Segregation and Occupational Choice (2008)
Working Paper: Aspirations, Segregation and Occupational Choice (2008)
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