Human Capital, Self-Esteem, and Income Inequality

Mark Gradstein and Luigi Ventura

No 18474, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We introduce into a human-capital based growth framework utility from self-esteem, driven by academic achievements. Self-esteem, through its effect on human capital, is shown to shape the intertemporal evolution and the persistence of income inequality, in general, and across population groups. Inequality persistence is obtained because of the wedge that the self-esteem component creates between households whose academic achievements are high enough as opposed to those whose achievements are insufficiently low. Among the several extensions, it is shown that controlling parenting style can exacerbate income inequality while reducing children’s self-esteem.

Keywords: Cultural; traits (search for similar items in EconPapers)
JEL-codes: D31 J15 J24 O11 (search for similar items in EconPapers)
Date: 2023-09
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Journal Article: Human capital, self-esteem, and income inequality (2024)
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