Endogenous persistent inequality

Falilou Fall

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Abstract: The purpose of this paper is to demonstrate that inherited humain 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 with inequality. Allowing for self-employment in the model generates the possibility of equality at equilibrium in addition to the inequality equilibrium with the emergence of a middle class.

Keywords: Endogenous inequality; human capital; occupational choice; education; Inégalité endogène; capital humain; choix professionnel; éducation (search for similar items in EconPapers)
Date: 2005-10
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00196084
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Published in 2005

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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:hal:journl:halshs-00196084

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