INCOME-DEPENDENT PARENTAL ALTRUISM AND PERSISTENT INCOME INEQUALITY IN A DEVELOPING ECONOMY

Xiangyun Yin and Tamotsu Nakamura
Additional contact information
Xiangyun Yin: Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada, Kobe 657-8501, Japan
Tamotsu Nakamura: Graduate School of Economics, Kobe University, 2-1 Rokkodai, Nada, Kobe 657-8501, Japan

The Singapore Economic Review (SER), 2025, vol. 70, issue 06, 1565-1582

Abstract: In this paper, we consider an overlapping-generations economy in which human capital is the engine of economic growth. Human capital accumulates through parents’ investments in their children based on warm-glow altruism. Assuming that parental altruism depends on parental income, we introduce a utility function into a simple model to explain the relationship between parental income and education expenditure. Consequently, various dynamics of household human capital accumulation emerge, which in turn yield a variety of income inequalities. This highlights the importance of income-dependent parental altruism in determining income inequality not only in the transition but also in the steady state. It is also shown that income inequality may persist in the long run.

Keywords: Income inequality; warm glow; human capital investment (search for similar items in EconPapers)
JEL-codes: D31 D64 I24 O15 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590824500462
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:70:y:2025:i:06:n:s0217590824500462

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590824500462

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().