Sorting and Long-Run Inequality

Richard Rogerson and Fernández, Raquel

No 2352, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Many social commentators have raised concerns over the possibility that increased sorting in a society can lead to greater inequality. To investigate this we construct a dynamic model of intergenerational education acquisition, fertility, and marital sorting and parameterize the steady state to match several basic empirical findings. Contrary to Kremer's (1997) finding of a basically insignificant effect of marital sorting on inequality, we find that increased marital sorting will significantly increase income inequality. Three factors are central to our findings: a negative correlation between fertility and education, a decreasing marginal effect of parental education on children's years of education, and wages that are sensitive to the relative supply of skilled workers.

Keywords: Fertility; Inequality; Marriage; Sorting (search for similar items in EconPapers)
JEL-codes: D30 I20 J11 (search for similar items in EconPapers)
Date: 2000-01
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Citations: View citations in EconPapers (14)

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Journal Article: Sorting and Long-Run Inequality (2001)
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