Endogenous persistent inequality

Falilou Fall

No 2005094, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The purpose of this paper is to demonstrate that inherited human capital is a powerful vector of inequality formation and persistence, irrespective of its links with financial wealth endowment. This paper argues that the agents who inherit a low level of human capital bear a greater utility cost in their educational investment and that there are different profiles of returns on human capital within the economy. These two arguments are sufficient to generate an endogenous formation of workers' and entrepreneurs' groups and a continuum of steady states withinequalit y. Allowing for self-employment in the model generates the possibility of equality at equilibrium in addition to the inequality equilibrium withth e emergence of a middle class.

Keywords: endogenous inequality; human capital; occupational choice; education (search for similar items in EconPapers)
JEL-codes: D33 J24 J31 J62 (search for similar items in EconPapers)
Date: 2005-01
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Endogenous persistent inequality (2005)
Working Paper: Endogenous persistent inequality (2005)
Working Paper: Endogenous persistent inequality (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2005094

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